SMM Zinc Market Morning Review (2015-4-21)

SHANGHAI, Apr. 21 (SMM) – The deposit reserve ratio cut by the PBOC failed to boost market sentiment, and concerns over Chinese economy weighed down base metals prices. LME zinc prices opened at USD 2,227.5/mt, then fell to USD 2,189.5/mt, down USD 27.5/mt or 1.24%. Trading volumes were up 4,049 to 12,479 lots, and total positions increased 1,147 to over 300,000. LME zinc inventories fell 2,975 to 492,575 mt.

SHFE 1506 zinc contract prices opened at RMB 16,420/mt, then touched RMB 16,530/mt, and closed the day at RMB 16,435/mt, down RMB 130/mt or 0.78%.

The PBOC lowered deposit reserve ratio for financial institutions by 1 percentage point, effective April 20. But this gave little boost to the market. LME base metals prices opened high but moved lower. Asia-Pacific stocks were mixed. PMIs from China, Europe and the US are slated for release this Thursday. HSBC’s April manufacturing PMI for China is expected to fall further.

China’s real estate company Kaisa Group defaulted.

US companies’ earnings reports mostly topped market expectations, boosting US stocks.

Ongoing Greek crisis continued to plague the market.

The US dollar index rose 0.47%; the EUR:USD fell 0.63%; European and US stocks mostly increased. Asia-Pacific stocks were mixed. LME base metals prices closed with declines except for nickel.

LME zinc prices are expected to move between USD 2,175-2,205/mt today. SHFE 1506 zinc contract prices will fluctuate between RMB 16,400-16,500/mt, with spot discounts of RMB 100-60/mt against SHFE 1506 zinc contract prices.