SHANGHAI, Aug 18 (SMM) –The most-active SHFE 2009 contract traded robustly today, climbing to 20,060 yuan/mt with an increase of over 2%, and was 19,905 yuan/ton as of 11:07 Beijing time, an increase of 1.95%.
The People's Bank of China (PBOC) said in a statement it was keeping the rate on 700 billion yuan worth of one-year medium-term lending facility (MLF) loans to financial institutions steady at 2.95% from previous operations. The PBOC also said that the rollover was a one-off MLF operation for the whole month to fully meet market demand. Meanwhile, the central bank injected 50 billion yuan into the market through seven-day reverse repos at an interest rate of 2.2 percent. The loose monetary policy and the robust trade of A shares boosted macro sentiment and attracted long positions.
Optimistic long-term consumption expectation supported Zinc prices. Social inventories of zinc ingots continued to decline amid improved downstream consumption. An SMM survey showed total social inventories of zinc ingots were 175,100 mt as of August 14th, down 17,000 mt from the week of August 7. Whether the contract could break above 20,000 yuan/mt will come under scrutiny in the short term.