SHANGHAI, Mar 23 (SMM) - The US Federal Reserve announced on Wednesday that it would raise interest rates by 25 basis points to 4.75-5.00% while signalling that interest rate hikes might be paused in view of the recent turmoil in the financial sector. As a result, the three major US stock indexes closed down at least 1.6% across the board, and US dollar also slid.
Overnight, LME zinc opened at $2,864.5/mt and closed up $4/mt or 0.14% at $2,877/mt. The trading volume was 5,477 lots, and open interest gained by 24,045 lots to 208,000 lots. LME zinc inventory shed by 100 mt to 39,750 mt, but the overall inventory still climbed steadily as increases generally outweighed declines. SHFE/LME zinc price ratio stabilised at above 7.7, and SHFE zinc still outperformed LME zinc. The tightening of capital liquidity resulted in bearish sentiment overseas.
The most-traded SHFE 2305 zinc contract opened at 22,350 yuan/mt and closed at 22,320 yuan/mt, up 50 yuan/mt or 0.22%. Trading volume stood at 42,000 lots, and open interest gained by 4,020 lots to 102,000 lots. The environmental pollution in north China disrupted the operation of galvanising plants in Hebei and Tianjin, which will limit the consumption of zinc ingots in the near term. In the spot market, the mediocre downstream demand and poor transactions will weaken the support for zinc prices.
