SHANGHAI, Feb 16 (SMM) - Overnight, LME zinc opened at $3,090/mt and went down to close at $3,005/mt, down $92.5/mt or 2.99%. Trading volume dropped to 6,036 lots, and open interest added 978 lots to 200,000 lots. LME zinc inventory decreased by 250 mt to 25,075 mt, a drop of 0.99%.
Overnight, the monthly rate of retail sales in the United States recorded 3% in January, well above the estimate; Europe is expected to raise interest rates by 50 basis points in March, citing that overseas inflation pressures are still high; US dollar strengthened and non-ferrous metal prices generally fell.
The most-traded SHFE 2303 zinc contract fell sharply after opening at 22,860 yuan/mt overnight, and touched a low of 22,660 yuan/mt before rallying and finishing at 22,705 yuan/mt, down 410 yuan/mt or 1.77%. Trading volume was down to 50,343 lots, and open interest gained by 881 lots to 82,382 lots.
The higher-than-expected inflation rate overseas prompted shorts to raise their positions last night, and both domestic and overseas zinc prices weakened. At the same time, recent fluctuations in zinc prices resulted in poor trades in the market, so the downstream enterprises mainly took a wait-and-see stance. Zinc prices are expected to decline further in the near term.
