Spot premiums hovered at high levels last week. As of last Friday, premiums of domestic regular brands stood at 170-210 yuan/mt over the SHFE June zinc contract, and spot premiums of Shuangyan zinc were 270 yuan/mt over the contract. Traders raised quotes in the first half of the week amid the large price spread between the SHFE front-month and SHFE next-month zinc contracts.
Downstream buyers stood on the sidelines, and slow sales lowered spot premiums slightly. Zinc prices plunged at the week’s end, but downstream pessimism over prices prevented spot premiums from rising. Overall transaction picked up but were weaker than expected. This week, the influx of imported zinc ingots and the poor performance of downstream consumption will weigh down spot premiums.