Zinc Prices Continued to Weaken

SHANGHAI, Mar 22 (SMM) - On the news front, Russian President Vladimir Putin said on Tuesday after talks with Chinese President Xi Jinping that China's constructive proposals could serve as the basis for a peaceful settlement for the Russia-Ukraine conflict, but he believed that the West and Kiev were not ready yet for such a peace settlement. US existing home sales in February posted the largest increase in two-and-a-half years, helped by a pullback in mortgage rates. Teiden, president of Sweden's central bank Riksbank, said that the central bank will stick to a rate hike of 25 or 50 basis points based on the economic situation in February, though he also said that the turmoil in the financial market will be taken into consideration during next rate hike.

Overnight, LME zinc opened at $2,896/mt and closed down $25/mt or 0.86% at $2,873/mt. The trading volume was 7,411 lots, and open interest lost 333 lots to 184,000 lots. LME zinc inventory added by 2,475 mt to 39,850 mt. The growing LME zinc inventory has limited support for LME zinc prices. The premiums of LME cash to 3M contract fell to $27/mt. Although the concentration of capitals weakened, the bearish macro sentiment still lingered, thus LME zinc prices may maintain fluctuating at lows.

The most-traded SHFE 2305 zinc contract opened at 22,410 yuan/mt and closed at 22,265 yuan/mt, down 105 yuan/mt or 0.47%. Trading volume stood at 89,000 lots, and open interest gained by 4,089 lots to 93,000 lots. The spread between front-month next-month SHFE zinc contracts are expanding, enhancing the bearish sentiment among downstream enterprises. The spot trading has gradually dropped, and the zinc ingot social inventory across seven markets in China has fallen to 165,000 mt. However, the downstream demand recovery is still sufficient to underpin SHFE zinc prices.