Contango Falls Sharply, Market Trading Sluggish [SMM Tianjin Zinc Spot Weekly Review]

SMM News on May 16: This week, spot premiums in the Tianjin region plummeted, dropping by approximately 205 yuan/mt WoW. As of Friday this week, domestic common brands were quoted at premiums of 200-300 yuan/mt against the 2506 contract, while high-priced brands were quoted at premiums of 300-350 yuan/mt against the 2506 contract. The Tianjin market was on par with the Shanghai market, and the price spread between the two markets narrowed. Zinc prices held up well during the week, while downstream consumption slightly weakened. Downstream procurement enthusiasm was low, with purchases mainly driven by immediate needs for restocking or long-term contracts. Moreover, downstream players still held bearish sentiment, and prices had not yet reached their psychological price levels. As a result, zinc ingot inventory in Tianjin experienced a buildup. To facilitate sales, traders continuously lowered premiums and discounts, leading to a significant decline in premiums. Overall trading was sluggish this week. It is expected that premiums may continue to decline next week.

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