SHANGHAI, Mar 16 (SMM) – Spot quotes in east China have moved rangebound since mid-February. The inventory accumulation during CNY holidays led to ample supply in the market, while the high zinc prices dampened downstream purchasing interest. Spot premiums turned from 30 yuan/mt into discounts of 25 yuan/mt amid tepid trades. In late February, demand gradually strengthened and procurement increased, benefiting from the drop in zinc prices and the production resumption at most downstream producers. Improving trading helped spot quotes stop falling and rebound. Previous stockpiling resulted in subdued trades in early March. Some sellers raised prices but spot quotes moved at low levels due to sluggish trades. South China saw higher spot quotes, though.
In mid-February, spot quotes changed little as downstream producers had not fully resumed production and mainly worked through inventory. Meanwhile, arriving shipments were limited. A combination of production resumption at most downstream producers and tight supply of cargoes in the market bolstered spot discounts to narrow from 65 yuan/mt to 20 yuan/mt. Spot quotes stopped rising in March with cargoes under warrants offered for sale and a slight increase in arriving shipments. Spot quotes in north China weakened.
In mid-February, due to the weak pre-holiday stockpiling and the early production resumption, spot discounts hovered around 40 yuan/mt. Slow growth of orders kept market procurement weak, and poor trading lowered spot quotes. Entering March, production restrictions driven by the Two Sessions of NPC and CPPCC forced some enterprises to lower their operating rates. Spot quotes were rangebound amid weak demand and supply.
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