Lower zinc futures prices failed to improve spot trades in Shanghai 

SHANGHAI, Dec 24 (SMM) – Transactions of spot zinc did not improve significantly on the morning of December 24 in Shanghai albeit declines in Shanghai zinc futures and spot premiums. 

Downstream consumers remained cautious about procuring when muted trades prompted sellers to lower premiums to 300-310 yuan/mt, over the SHFE January 2020 zinc contract, down from premiums of 350-360 yuan/mt in early trades this morning. 

The end of delivery for long-term contracts likely accounted for the subdued demand. SMM expects downstream consumption to pick up if zinc prices extend the slide in the sessions ahead. 

At noon on Tuesday, #0 zinc traded at 18,290-18,330 yuan/mt, and #1 zinc at 18,220-18,260 yuan/mt in Shanghai.

The northern Chinese market of Tianjin, however, saw active trades of spot zinc on the back of reduced futures prices. Consumers shifted to high-quality cargoes, and some buyers even locked in pre-sale products. 

At noon of December 24, offers of #0 common brands zinc stood at a premium of 180-210 yuan/mt over the SHFE January 2020 contract, with premiums of high-quality brands at 240-270 yuan/mt. 

The Tianjin-Shanghai price spread limitedly changed at a discount of 130 yuan/mt. Trades of #0 zinc ingot occurred at 18,160-19,600 yuan/mt in Tianjin on Tuesday. 

On December 24, the SHFE January 2020 zinc contract traded lower and closed the morning trading session down 0.77% on the day at 18,050 yuan/mt.