SHANGHAI, May 24 (SMM) - LME zinc opened at $2,422.5/mt on Tuesday and went down before closing at $2,354/mt, down $71.5/mt or 2.95%. Trading volume added 1,265 lots to 9,278 lots, and open interest rose 2,652 lots to 186,000 lots. LME zinc inventory decreased by 500 mt to 45,775 mt, a drop of 1.08%. The US Federal Reserve said it may raise interest rates further to curb inflation. The US debt crisis is looming large, thus the market sentiment was bearish, sending LME zinc prices down.
The most-traded SHFE 2307 zinc contract opened at 19,660 yuan/mt overnight and closed at 1,963 yuan/mt, down 435 yuan/mt or 2.17%. Trading volume fell 60,636 lots to 78,236 lots, and open interest rose 349 lots to 138,000 lots. The social inventory of zinc ingots continues to fall, but the fundamentals are about to weaken. Smelters maintain high operating rates. Inflows of imported zinc ingots will have an impact on the domestic market. Downstream consumption is in the off-season. As such, SHFE zinc prices may go down soon.
