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Shanghai Zinc Rallies amid Low Inventories

Metal News - Published on Fri, 19 Jul 2019

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SMM reported that Shanghai zinc trended upwards this week, propelled by its stronger LME counterpart on growing expectations of Fed rate cuts and the absence of a substantial rebound in domestic social inventories. The most active September contract on the Shanghai Futures Exchange rose on Wednesday for a third consecutive day, gaining 0.57% to close at 19,355 yuan/mt, after hitting a nearly two-week high of CNY 19,550 per tonne overnight.

The US central bank is expected to embark on interest rate cuts at the Federal Reserve’s policy meeting later this month. This buoyed London zinc this week, followed by gains in Shanghai zinc.

On the fundamentals front, social inventories of refined zinc in China have yet to see a substantial rebound, which also lent support to prices.

SMM data showed that stocks across Shanghai, Tianjin and Guangdong decreased by 200 tonne from Friday July 12 and by 1,700 tonne from Monday July 8 to stand at 146,300 tonne as of Monday July 15.

Summer maintenance at some smelters and bargain-hunting purchases by downstream consumers deterred social inventories from sharply ramping up.

Inventories, however, are expected to grow as supply will expand after smelters recover from maintenance and as overall consumption is weak in a low season.

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Posted By : Ratan Singh on Fri, 19 Jul 2019
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