The most-traded November zinc contract on the SHFE traded at 25,490 yuan ($3,850) per tonne as of 02:30 BST, up 315 yuan from Monday’s close, with over 200,000 lots of the contract having changed hands so far.
The LME three-month zinc price had jumped 2% to as high as $3,120 per tonne on Monday.
SHFE base metal prices are generally seeing support from the large drawdown in stocks ahead of China’s weeklong National Day holiday, which begins October 1.
Base metals stocks at SHFE-registered warehouses, except for aluminium, were all lower on September 22 as market participants stepped up procurement before the Chinese holidays.
SHFE copper stocks fell to 141,318 tonnes in the week ending September 22, down 25,429 tonnes or 15.3% on the previous week. It was also the fifth consecutive week that SHFE copper stocks have declined. Zinc inventories slipped 2,438 tonnes over the week to 67,225 tonnes on September 22.
On Monday, the SHFE announced that effective September 26 it will charge transaction fees for day trades of the November lead contract at 0.02% of the transacted amount. SHFE lead prices had surged since last week on concerns over supply constraints with the most active lead contract rising to as high as 21,070 yuan per tonne on September 21, this was the highest since December 2016.
“In the short-term, the fee rise by SHFE could result in profit-taking. But in the medium-term, SHFE lead and zinc prices should remain supported. Any corrections are unlikely to be major,” China’s Galaxy Futures said late on Monday.
Rest of complex higher
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