SHANGHAI, Mar 7 (SMM) - On the macro front, the factory orders in the US in January fell by 1.6% on the month, lower than the expected 1.80%. In February, the New York Fed’s global supply chain stress index fell sharply to -0.26, the lowest level since August 2019, which was also lower than the historical average. European Central Bank officials continued to delivered hawksish remarks. Chief Economist Lane said the current information indicated further rate hikes were on the way after March. European Central Bank Governing Council Holzmann also expected four more 50 basis-point interest rate hikes. The euro strengthened against the U.S. dollar on the news, hitting its highest level since February 21. China’s National Development and Reform Commission stressed on continuous focus on the regulation and supervision of coal prices while guarding against the risks in real estate, finance, and local government debt. It is reported that policies will be rolled out to restore and expand consumption.
Overnight, LME zinc opened at $3,052.5/mt and touched $3,000/mt before finishing up $8.5/mt or 0.28% at $3,051.5/mt. Trading volume was down to 5,148 lots, and open interest lost 1,066 lots to 193,000 lots. LME zinc inventory decreased by 300 mt to 35.150 mt. The European Central Bank released hawkish remarks, and LME fell under pressure during European trading hours and pulled back at night session.
The most-traded SHFE 2304 zinc contract opened at 23,230 yuan/mt and closed at 23,465 yuan/mt, up 95 yuan/mt or 0.41%. Trading volume was reduced to 43,280 lots, and open interest gained by 1,546 lots to 83,980 lots. In terms of fundamentals, TCs at most domestic mines have been lowered recently. At present, there are relatively few goods available at ports, and the supplies at some mines are tight due to labour shortage. Nevertheless, the zinc smelters are currently running normally, unaffected by the disruptions on raw material side. Powell’s testimony and the policies to be introduced during the Two Sessions will be watched.
