Greater supply of spot zinc weighs on premiums

SHANGHAI, Feb 20 (SMM) – An influx of delivered cargoes in the market and caution across downstream buyers weighed on offers of spot zinc in n Shanghai on the morning of Wednesday February 20. Overall trades cooled from the previous morning. 

On the morning of Wednesday February 20 in Shanghai, #0 zinc traded at 21,680-21,720 yuan/mt, and saw traded prices of #1 zinc at 21,520-21,560 yuan/mt. Offers of #0 zinc stood mostly at a premium of 70-90 yuan/mt over the SHFE 1903 contract, while premiums of higher-quality Shuangyan brand came in at 200-220 yuan/mt at noon.  

Greater supplies lowered offers to a premium of 80-90 yuan/mt, from 90-100 yuan/mt in early trades, but actual trades occurred mostly at a premium of 70-80 yuan/mt for the first trading session in the morning. Offers changed little during the second session till noon, and transaction activities slowed. 

In Guangdong, premiums also declined during the morning of February 20, to 50 yuan/mt over the SHFE 1904 contract at noon, from 70 yuan/mt in early trades, as sellers were eager to destock amid sufficient supply. Traded prices of #0 zinc mostly occurred at 21,510-21,580 yuan/mt. The Guangdong-Shanghai price spread remained at a discount of 150 yuan/mt at noon. 

The SHFE 1904 contract traded rangebound and settled at 21,495 yuan/mt at the end of this morning trading session, up 75 yuan/mt from that time on Tuesday. The SHFE 1903 contract traded some 125 yuan/mt higher than the 1904 contract at noon.