With participants seemingly staying cautious ahead of key events and releases next week, most base metals prices have pushed lower this morning.
“We think markets are in wait-and-see mode and will remain that way for the balance of the week. A number of developments head our way next week, including the Federal Reserve rate decision on Wednesday and a possible $60 billion trade levy that the White House could impose on the Chinese,” Ed Meir, INTL FCStone analyst said.
“The tariff issue is now front and center in terms of market concern and is largely responsible for the lower trend we have been seeing in a number of commodity markets,” he added.
Zinc and lead prices have shown more resilience this morning, with the latter’s prices edging higher on the back of expectations for supply to tighten in the near term.
The most-traded May zinc contract on the SHFE increased to 24,895 yuan ($3,938) per tonne as of 10.02am Shanghai time, up by 35 yuan or 0.1% from Thursday’s closing price of 24,860 yuan per tonne.
Shrinking profit margins due to low treatment charges for zinc concentrates may cause Chinese smelters to lower their operating rates, according to China’s Galaxy Futures.
Furthermore, Chinese smelters typically begin planned maintenance at the end of March, so there is an expectation for the supply of refined zinc metal to tighten over the next few weeks, it added.
Zinc’s sister metal lead also gained during today’s early session – the heavy metal has been supported by declining stocks on the London Metal Exchange and subsequent price increases there.
The SHFE May lead contract price rose by 60 yuan or 0.3% to 18,520 yuan per tonne.
Concerns over additional supply pressure Ali prices
Rest of metals decline
Currency moves and data releases