LME zinc price moves downward, eyes on subsequent US economic data

Spot fundamentals:

Shanghai: In the morning, spot discounts were 0~10 yuan/mt over the average SMM zinc price. During the second trading session, regular domestic brands were quoted with discounts of 100~120 yuan/mt over the SHFE 2405 zinc contract. Shuangyan zinc was quoted with discounts of 0 yuan/mt over the contract. Zinc prices strengthened. Downstream companies have replenished their stocks. As prices rose, trading weakened.

Guangdong: In the first trading period, cargo sellers quoted brands such as Qilin, Huize and Mengzi with premiums of 0-15 yuan/mt. As SHFE zinc prices rose, sellers raised quotes but downstream buying weakened. In the second trading period, Qilin, Mengzi, etc. were offered a discount of 75~95 yuan/ton. Sellers lacked interest in selling. Transaction was poor.

Tianjin: As of noon, spot discounts of ordinary brand Chihong stood at 70~80 yuan/mt over SHFE May zinc contract, Hongye 70~80 yuan/mt. Discounts were 80 yuan/mt for Xinzi zinc, 100 yuan/mt for Bailing zinc, with no quotes for Kazakhstan zinc. High-priced brand Zijin was offered with discounts of 0~50 yuan/mt. SHFE zinc prices rebounded, the downstream market had a strong bearish sentiment and traders kept prices firm.The overall market trading was weak.

Ningbo: In the first trading period, Yongchang was quoted with discounts of 20-30 yuan/mt over the 2405 contract, and Huize with discount of 20 yuan/mt to premium of 40 yuan/mt for the 2405 contract; discounts were 60 yuan/mt for SMC, delivery-to-factory. In the second trading period, quotes by traders were flat from the first trading period. Imports at low prices continue to flow into Ningbo, and the Ningbo market still has a large volume of goods. The spot discounts remain low. Downstream companies are in a wait-and-see mood. The overall spot transaction did not improved significantly.

LME zinc inventory dropped by 750 mt or 0.29% to 255100 mt. The 2.6% month-on-month growth in U.S. durable goods orders in March was basically in line with expectations. The rise in the U.S. dollar index again suppressed zinc prices. We will pay attention to the U.S. economic data to be released later this week. Demand remains weak. It is expected that the subsequent upward space for SHFE zinc may be limited.