Downstream consumers stockpile spot zinc on lower prices

SHANGHAI, Aug 23 (SMM) – Spot zinc trades improved in Shanghai on the morning of Friday August 23 as downstream consumers stockpiled before the weekend and as futures prices of zinc extended declines. 

Traders in Shanghai withheld from purchasing as they expected lower prices on more arrivals from Guangdong next week. 

Sellers lowered offers to spur trades. At noon of August 23, premiums of #0 common brands stood at 150-160 yuan/mt, against the SHFE front-month September contract, compared with premiums up to 170 yuan/mt during the previous morning. 

At noon on Friday August 23, traded prices of #0 zinc stood at 18,680-18,730 yuan/mt, and that of #1 zinc at 18,610-18,660 yuan/mt,

In the southern Chinese market of Guangdong, spot zinc trades also rallied on lower futures prices. Sellers reduced premiums by some 10 yuan/mt from early trades to 70 yuan/mt, over the SHFE October contract at noon of Friday, as the price difference between September and October contracts widened. 

Trades of #0 zinc occurred at 18,470-18,570 yuan/mt. The Guangdong-Shanghai price spread grew to a discount of 180 yuan/mt, from a discount of 160 yuan/mt on Thursday. 

The SHFE September contract extended declines from overnight and closed the morning of Friday August 23 at 18,550 yuan/mt, down 0.75% from that time on Thursday.