Spot zinc trades weaken as higher futures prices grew market caution

Published: Jul 18, 2019 15:54

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At noon on Jul 18, #0 zinc traded at 19,480-19,530 yuan/mt, and higher-grade brands at 19,500-19,540 yuan/mt

SHANGHAI, Jul 18 (SMM) – Spot zinc trades cooled in Shanghai on the morning of Thursday July 18 as higher futures prices kept downstream consumers cautious.

Sellers in Shanghai held premiums firm at 70-90 yuan/mt, against the SHFE front-month August contract, compared with premiums of 60-70 yuan/mt in the previous morning on Wednesday. Offers of same zinc brand varied at different warehouses, SMM learned.

At noon on Thursday July 18, traded prices of #0 zinc stood at 19,480-19,530 yuan/mt, and that of the higher-grade Shuangyan and Chihong brands at 19,500-19,540 yuan/mt, with premiums at 80-100 yuan/mt over the SHFE August contract.

In the northern Chinese market of Tianjin, spot zinc also traded poorly as a rally in futures prices outweighed premiums cuts across sellers. At noon of July 18, offers of higher-quality zinc stood at a premium of 70-80 yuan/mt over the SHFE August contract, and that of lower-grade products at 40-50 yuan/mt against the September contract.

Trades of #0 zinc occurred at 19,440-19,510 yuan/mt, and deals for #1 zinc at 19,390-19,460 yuan/mt at noon. The Tianjin-Shanghai price spread flipped to a discount of 30 yuan/mt, from flat on Wednesday.

The SHFE August contract extended overnight gains and closed the morning of Thursday July 18 at 19,550 yuan/mt, up 95 yuan/mt from that time on Wednesday.

Market commentary Futures movement Spot zinc

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