Sufficient supply, higher futures prices lower spot zinc offers

SHANGHAI, Feb 27 (SMM) – Higher prices of futures sidelined downstream consumers of spot zinc in Shanghai, though sellers lowered offers on the morning of Wednesday February 27. Supply pressure also drove sellers to reduce offers.

This morning in Shanghai, #0 zinc traded at 21,860-21,880 yuan/mt, and saw traded prices of #1 zinc at 21,740-21,780 yuan/mt. Traders contributed to most of the transactions, SMM learned. 

At noon, offers of #0 zinc were at a discount up to 30 yuan/mt over the SHFE 1903 contract, compared with a discount of 10 yuan/mt in early trades. 

Premiums of higher quality Chihong and Shuangyan brands stood at 50-70 yuan/mt this morning, compared with 80-90 yuan/mt on the morning of Tuesday February 26. 

In Guangdong, discounts grew some 20 yuan/mt from Tuesday, to 50-10 yuan/mt over the SHFE 1904 contract, as sellers were eager to destock and downstream buyers limitedly recovered. 

Traded prices of #0 zinc mostly occurred at 21,800-21,870 yuan/mt this morning. The Guangdong-Shanghai price spread stood at a discount of 60 yuan/mt, narrowing from 90 yuan/mt on Tuesday. 

The SHFE 1904 contract strengthened and settled at 21,855 yuan/mt at the end of this morning trading session, up 85 yuan/mt from that time on Tuesday. The SHFE 1903 contract traded some 40 yuan/mt higher than the 1903 contract at noon.