Zinc Price Forecast

Nov 22, 2010 06:42 GMT   Source: SMM

Tags: zinc price,  zinc Zn

SHANGHAI, Nov. 22 (SMM) -- Last week, SHFE zinc prices fell sharply leading other metal price decreases, with prices falling by daily limits on Monday and Wednesday, down from RMB 20,000/mt the previous week. On Wednesday, SHFE zinc prices fell by the daily limit to RMB 17,815/mt. On Thursday, SHFE zinc prices rallied to RMB 18,000/mt, but still moved below all the daily moving averages. SHFE 1103 zinc contract prices were down 17% last week. In spot markets, zinc spot prices dropped along with SHFE zinc prices, with spot prices falling to RMB 17,000/mt, down from RMB 18,000/mt early last week, and with some spot zinc traded at low as RMB 16,800/mt, down 12%. SHFE zinc prices were able to resist significant declines compared with LME zinc prices. Downstream buyers purchased modestly, but smelters were reluctant to move goods at lower prices. Market supply was mainly available from arbitragers. Spot transaction was brisk.

SHFE zinc prices have lost upward momentum and will fluctuate at low levels next week.  SHFE 1103 zinc contract prices are expected to fluctuate around RMB 18,000/mt. In spot markets, smelters were unwilling to sell goods at lower prices, while arbitragers were aggressively selling goods given strong profits. As a result, zinc spot prices should fluctuate low around RMB 17,000/mt in the coming week, although with strong support from smelters.

 

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