SHANGHAI, Jun 21 (SMM) – Shanghai zinc prices continued to fall, weighed by concerns about greater supplies from domestic smelters and poor consumption.
The most active August contract on the Shanghai Futures Exchange extended overnight losses to a five-month low of 19,605 yuan/mt by the midday of Friday June 21. SHFE zinc has declined for six days in the past seven trading days, on track for a second straight week of decline.
Social inventories of refined zinc across Shanghai, Tianjin and Guangdong saw a substantial increase from the end of May. The stocks came in at 155,200 mt as of June 21, up some 8% from 143,900 mt recorded on May 31, showed SMM data.
A slew of smelters recovered from maintenance in June, and nationwide output for the month is expected to expand 21,100 mt from May to 525,300 mt, as high treatment charges maintain high production enthusiasm among smelters.
Spot trades, however, remained tepid, even as premiums rapidly fell after the delivery for the June contract. Poor orders kept zinc consumers cautious about procurement. Galvanising plants are even on the verge of losses due to high ferrous costs.