SHANGHAI, Jun 11 (SMM) – Despite buoyance from LME prices, Chinese domestic zinc price is unlikely to see much more upward room with limited support from weaker fundamentals, SMM believes.
The SHFE 1808 zinc contract traded rangebound on the morning of Monday June 11 after touching a high at 24,510 yuan/mt.
Supply of zinc is set to grow in June as smelters underwent maintenance last month are scheduled to resume operations, SMM learned.
The domestic market has also continued to see inflows of imported zinc since the import window opened in April and May. This has built up zinc inventory in China, SMM data showed.
On the demand front, consumers are expected to take a watch-and-wait stance due to impact from the nationwide environmental reviews in June. The Shanghai Cooperation Organization (SCO) summit in Qingdao, which ended on June 10, saw most of the zinc downstream plants suspended for nearly half a month.
However, SHFE zinc prices are not expected to slump due to support from its LME counterpart, which was underpinned by robust overseas demand.
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