Bearish sentiment weigh on zinc spot premiums

SHANGHAI, May 22 (SMM) – In China's spot zinc market on Tuesday May 22, traders lowered premiums with the highest offers flat from the previous day. Downstream buyers purchased on demand as supplies were adequate and as the outlook on zinc prices remained bearish, SMM learned. 

Overall transaction liquidity shrank in Shanghai and stayed flat in Guangdong. 

The SHFE zinc 1806 contract dipped twice during the morning trading session to a low of 23,830 yuan/mt and closed at 23,900 yuan/mt before noon. 

In Shanghai, #0 zinc mostly traded at 24,060-24,100 yuan/mt. The 0# common brand was offered at a premium of 120-180 yuan/mt against the SHFE 1806 contract, compared with premiums of 160-180 yuan/mt on Monday. The premium for 0# Shuangyan brand also lost 40 yuan/mt from Moday to 130-180 yuan/mt. At noon, 1# zinc traded at 23,960-24,000 yuan/mt, close to prices of imported zinc.

In Guangdong, #0 zinc mostly traded at 23,940-24,050 yuan/mt. The Guangdong-Shanghai price spread narrowed 40 yuan/mt from the previous day to 60 yuan/mt. Cargoes mostly traded at a premium of 150-180 yuan/mt over the SHFE 1807 contract, down 20 yuan/mt from yesterday. Downstream buyers inquired actively but made few purchases as they were pessimistic on zinc prices. 

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