SHANGHAI, Apr 4 (SMM) - On the macro and news front, the PMI of ISM manufacturing in the US recorded 46.3 for March, the lowest level since May 2020; the Atlanta Fed’s GDPNow model has downgraded its forecast for US’s GDP growth rate in the first quarter from 2.5% to 1.7%; the White House stated that it had learned about the oil production cut plan from Saudi Arabia in advance, but did not know the reason for such a decision, saying it intended to rebuild the strategic petroleum reserve. The White House’s attitude has softened significantly this time compared to last year when Saudi Arabia led OPEC to announce oil production cut of 2 million barrels per day. Russian Deputy Prime Minister Novak said that in January and February, OPEC+ has more than completed its production targets, so the member countries are free to join in production cuts if they want to; Fed's Bullard believed that Fed’s interest rate need to be higher than 5%. While it still remains to be seen whether OPEC's oil production cuts will have a lasting impact, the inflation is expected to linger amid a strong labour market.
LME zinc opened at $2,910/mt overnight and experienced an inverted V-shaped trend before closing down $21.5/mt or 0.74% at $2,886/mt. Transaction volume rose to 5,949 lots, and open interest expanded by 3,441 lots to 182,000 lots. Transaction volume stood at 5949 lots, and open interest rose by 3441 lots to 185,000 lots. LME zinc inventory shed by 25 mt to 45,050 mt.
The most-traded SHFE 2305 zinc contract opened higher at 22,585 yuan/mt in overnight trading, touching a high of 22,690 yuan/mt, and finished at 22,510 yuan/mt, down 120 yuan/mt or 0.53%. Trading volume was down to 45,960 lots, and open interest fell 2,314 lots to 95,196 lots.
The March Caixin China manufacturing PMI recorded 50.0, indicating that the business activity in the manufacturing sector was flat from February, a sign of a slowdown in recovery. Fundamentally, the social inventory of zinc ingots has accumulated slightly to 155,200 mt. Although zinc consumption has been weighed down by falling operating rates of downstream enterprises, the zinc prices are still underpinned by the peak season.
