27% Investors Expect Zinc to Climb This Week, SMM Survey

SHANGHAI, Dec. 22 (SMM) – SMM survey of over 30 industry insiders finds that 53% are neutral and expect LME zinc to move between USD 1,500-1,550/mt this week, and SHFE 1602 zinc to fluctuate between RMB 12,550-12,950/mt. European and US markets will close this Thursday due to Christmas holiday, so investors are expected to remain cautious. China’s markets will be mainly subject to fundamentals. A growing number of small and medium mines in South China cut output or suspend production due to falling zinc prices, tightening ore supplies in some regions. TCs for imported zinc concentrate also fell. As such, zinc prices are expected to rise. But demand did not improve against year-end cash tightness, while inventories stay high.

See SMM Forecast Please Click:LME Zinc to Look for Price Floor Next Week

27% are bullish, expecting LME zinc to reach USD 1,590/mt and SHFE 1602 to point to RMB 13,300/mt. Any upward room for the US dollar index should be limited now that Fed interest rate increase was absorbed by the market. US Q3 growth, November PCE price index and durable goods orders slated for release this week are not promising as a whole. This will weigh on the US dollar.

20% are bearish, seeing LME zinc fall below USD 1,500/mt, and SHFE 1602 drop below RMB 12,500/mt. The US lift a ban on oil exports which remained in place for four decades, and this should weigh down crude oil prices. Meanwhile, US rig count rose 17 last week, the largest weekly increase since July. On spot zinc front, demand remains anemic. Some end-users were forced to cut or cease production due to cash tightness, and this will continue to drag down zinc prices in the near term.