Higher prices of futures lower zinc spot trades

Published: Oct 24, 2018 14:50 (GMT+8)

Save

Trades in Shanghai on Oct 24 thinned from a day before as higher futures prices grew caution downstream

SHANGHAI, Oct 24 (SMM) – Trades in Shanghai's zinc spot market on Wednesday October 24 thinned from a day before as higher futures prices of zinc grew caution among downstream consumers.

In Shanghai, traders lowered premiums of domestic #0 zinc to 100-120 yuan/mt before noon, from 180 yuan/mt in the early morning. Offers of imported zinc stayed relatively firm at a premium of 70-130 yuan/mt. Demand from traders' long-term contracts weakened and this weighed on overall transactions this morning, SMM learned.

In the morning, the 0# common brand was mostly offered at a premium of 100-150 yuan/mt over the SHFE 1811 contract in Shanghai; tighter supplies kept offers of Shuangyan brand at a premium of 400-450 yuan/mt.

Guangdong saw a similar situation as premiums for #0 zinc narrowed 150 yuan/mt from Tuesday to 300-330 yuan/mt over the SHFE 1812 contract, with traded prices of 22,580-22,680 yuan/mt. The Guangdong-Shanghai price spread stood at a discount of 110 yuan/mt today, 70 yuan/mt narrower from Tuesday. Downstream consumers purchased cautiously as price of futures hovered at highs.

The SHFE 1812 contract trade rangebound in the morning and closed at 22,360 yuan/mt at the end of the morning trading session, 375 yuan/mt higher from that time on Tuesday. This morning, the SHFE 1811 contract came off from highs and settled at 22,675 yuan/mt, up 270 yuan/mt from October 23.

Market commentary Futures movement Spot zinc

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

2 hours ago

End-use demand underperforms, zinc oxide operating rates edge down [SMM Zinc Oxide Weekly Review]

[Poor end-use demand performance, zinc oxide operating rate edges down] From the perspective of end-use demand performance, in the rubber-grade zinc oxide sector, tire enterprise orders are generally weak, and purchases of zinc oxide remain just-in-time; orders in the desulfurization field perform poorly, with demand remaining sluggish...

2 hours ago

3 hours ago

Die-casting zinc alloy operating rates trend lower, expected to decline further next week [SMM die-casting zinc alloy weekly review]

[Operating rate of die-casting zinc alloy declines, expected to fall further next week] The operating rate moved lower this week, mainly because some enterprises scheduled maintenance during the week, dragging down the overall operating level. In addition, some small and medium-sized enterprises have recently been affected by high prices, with weaker order performance, and there have been cases of proactive production control, which also weighed on the operating rate.

3 hours ago

Pre-holiday Stockpiling Drives Inventory Decline, Zinc Prices Consolidate at Highs [SMM Zinc Futures Brief]

[Pre-holiday stockpiling drives inventory decline, zinc prices consolidate at highs] The most-traded SHFE zinc 2611 contract opened at 26,740 yuan/mt. After the open, SHFE zinc consolidated around the daily average, touching an intraday high of 26,855 yuan/mt in early trading and a low of 26,690 yuan/mt during the session, before closing up 50 yuan/mt, or 0.19%, at 26,760 yuan/mt. Trading volume increased to 72,614 lots, and open interest rose by 2,140 lots to 148,000 lots.

3 hours ago