SMM Zinc Market Morning Review (2015-5-25)

SHANGHAI, May 25 (SMM) – US April CPI released last Friday was unexpectedly upbeat, and Fed Chairwomen Janet Yellen expressed they will hike interest rate this year and tighten monetary policies, boosting the US dollar index to hit a three-week high and weighing down base metals prices. LME zinc prices opened at USD 2,203/mt, then plunged and dipped to USD 2,163/mt, and closed at USD 2,175.5/mt, down USD 30.5/mt or 1.38%. Trading volumes decreased 134 to 12,743 lots, and total positions fell 86 to over 320,000. LME zinc inventories fell 1,975 to 460,000 mt.

The shift was made to SHFE 1508 zinc contracts last week, with prices opening at RMB 16,500/mt last Friday evening, then hovered around RMB 16,530/mt, and closed at RMB 16,545/mt, down RMB 110/mt or 0.66%. Total positions grew 4,950 to 84,316.

US April core CPI was up 0.3%, its most significant growth since January 2013. Janet Yellen’s statement pushed up the US dollar index by 0.81%. Commodity prices dropped across the board.

Bake Hughes reports the number of US oil drilling platforms decreased to 659, its lowest since August 20, 2010. But this failed to boost crude oil prices, with the latter down 1.65% due to oversupply and the rebounding US dollar index.

Growing Greek crisis increased risk aversion.

The US dollar index rose 0.81%. US stocks dropped, and European stocks were mixed. LME base metals prices decreased across the board.

US markets, UK and Hong Kong markets will all be closed today due to holiday. SHFE 1508 zinc contract prices will fluctuate between RMB 16,500-16,600/mt, with spot discounts of RMB 70-50/mt against SHFE 1508 zinc contract prices.