Slow demand erodes spot zinc premiums

SHANGHAI, Dec 12 (SMM) – Sluggish downstream demand weighed premiums of spot zinc on the morning of Wednesday December 12. Traders accounted for most transactions and downstream maintained on-demand purchase. 

In Shanghai, the 0# common brand was mostly offered at a premium of 270-280 yuan/mt over the SHFE 1901 contract. A higher quality of product kept offers of the Shuangyan and Chihong brands at a premium of 700-730 yuan/mt over the January contract. These compared with highs of 320 yuan/mt and 780 yuan/mt, respectively, on Tuesday December 11.   

Premium offers at 250-260 yuan/mt for #0 common brands were heard in the market at noon, compared with a high of 300 yuan/mt in the early morning. The #0 zinc mostly traded at 21,540-21,640 yuan/mt before noon. 

In Guangdong, sufficient supplies and slow demand also weighed spot premiums by 70 yuan/mt from Tuesday, to 360-380 yuan/mt over the SHFE 1901 contract. Traded prices mostly occurred at 21,620-21,720 yuan/mt. The Guangdong-Shanghai price spread narrowed to a premium of 100 yuan/mt at noon, from 140 yuan/mt on December 11.  

This morning, the SHFE 1901 traded rangebound and closed at 21,260 yuan/mt at the end of the morning trading session, up 30 yuan/mt from that time on Tuesday.