SHANGHAI, Feb 21 (SMM) - On the news front, China's former Foreign Minister Wang Yi had informal contact with US Secretary of State Blinken at the request of the US side. Wang made clear China's unwavering attitude towards the incident of downed airship and asked the US to admit and resolve the damage to Sino-US relations caused by their abuse of force. The European Union was considering joint purchases of weapons to help Ukraine meet its ammunition needs. As more Fed policymakers called for further interest rate hikes, the market expected for another 75 basis-point hike before summer.
Overnight, LME zinc opened at $3,074/mt and closed up $59/mt or 1.91% at $3,140/mt. The trading volume was 6,238 lots, and open interest added 21,211 lots to 220,000 lots. LME zinc inventory decreased further by 375 mt to 29,475 mt.
Last night, the most-traded SHFE zinc contract shifted to 2304 contract, which opened at 23,300 yuan/mt and finally settled at 23,570 yuan/mt, up 395 yuan/mt or 1.7%. The trading volume was 50,000 lots, and open interest gained 2,139 lots to 78,311 lots.
As the natural gas prices continued falling, overseas smelters gradually stopped losing money. Moreover, the French Auby smelter with production capacity of 150,000 mt announced that it would resume production in early March, which confirms the potential increase in overseas zinc supply. But the recovery of consumption overseas was not ideal, and the support for zinc prices has weakened due to sufficient supply.
Domestically, the consumption is still bolstered, but market players shall be wary of the influence of overseas zinc prices on domestic ones.
