Falling LME zinc inventories support LME zinc prices at high levels

Overnight, LME zinc prices opened at $2510.5/mt and went down to close at $2482/mt, down $92.5/mt or 1%. Trading volume dropped to 7424 lots, and open interest added 3169 lots to 200,000 lots. LME zinc inventories decreased by 3375 mt to 138400 mt, a drop of 2.38%. The continued decline in inventories and the expected reduction in overseas zinc concentrate production are expected to limit the decline in zinc prices.

The most active SHFE 2310 zinc contract prices opened at 21710 yuan/mt and lost 55 yuan/mt or 0.25% to settle at 21665 yuan/mt in overnight trading with the high-end of 21755 yuan/mt and the low-end of 21585 yuan/mt. Trading volumes decreased to 53520 lots and open interest fell 489 lots to 112,000 lots. Zinc prices are expected to run at a high level.