Shanghai zinc plunges over 3% after LME loss

The most-traded zinc contract for March delivery on the Shanghai Futures Exchange fell as much as 3.2%, its sharpest intraday drop in 11 weeks

  
Image used for illustrative purpose. Six different metal cubes isolated on white.

Image used for illustrative purpose. Six different metal cubes isolated on white.

Gettyimages

BEIJING  - Shanghai zinc fell more than 3 percent on Monday, the first trading session after a week-long national holiday, tracking a drop in London prices in the previous session.

London zinc fell 1 percent to $2,704 per tonne on Friday.

"Chinese zinc prices are expected to track London prices lower... Meanwhile, zinc could be even more volatile before demand from downstream users re-emerges in March," CITIC Futures analysts said in a note in Mandarin.

FUNDAMENTALS

* The most-traded zinc contract for March delivery on the Shanghai Futures Exchange fell as much as 3.2 percent, its sharpest intraday drop in 11 weeks, before settling down 3 percent at 21,605 yuan ($3,188.37) a tonne when the market closed for lunch at 0330 GMT.

* ZINC SPREAD: Cash zinc has moved from a premium to a discount against the three-month LME contract for the first time since September, suggesting shortages in nearby supply are easing.

* TRADE: U.S. negotiators are preparing to press China this week on longstanding demands that it reform how it treats American companies' intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports. 

* DOLLAR: The dollar stayed near a six-week high against a basket of currencies as fresh worries over U.S.-Sino trade tensions and global growth pushed investors towards the safety of the greenback.

* COPPER: Chilean state miner Codelco said on Saturday it hoped to soon restart operations at its northern Chuquicamata copper mine a day after heavy rains forced its suspension. 

* IRONORE: China iron ore futures rose to a record on Monday, the first session after a week-long national holiday, on concerns that supply from Brazil, the country's second-largest ore supplier, may decline after a fatal dam accident at a Vale mine. 

* COLUMN: Looking for answers from Dr Copper He's confused as well: Andy Home 

* For the top stories in metals and other news, click TOP/MTL or MET/L

MARKETS NEWS

* Asian shares started the week on the backfoot as investors were unable to shake off worries about global growth, U.S. politics and the Sino-U.S. trade war, keeping the safe-haven dollar well bid near a six-week top against major currencies.  

DATA/EVENTS

0930 Britain GDP Est 3M/3M Dec

0930 Britain GDP Estimate MM Dec

0930 Britain GDP Estimate YY Dec

0930 Britain Manufacturing Output MM Dec

0930 Britain GDP Prelim QQ Q4

0930 Britain GDP Prelim YY Q4

PRICES

Three month LME copper CMCU3

Most active ShFE copper SCFcv1

Three month LME aluminium CMAL3

Most active ShFE aluminium SAFcv1

Three month LME zinc CMZN3

Most active ShFE zinc SZNcv1

Three month LME lead CMPB3

Most active ShFE lead SPBcv1

Three month LME nickel CMNI3

Most active ShFE nickel SNIcv1

Three month LME tin CMSN3

Most active ShFE tin SSNcv1

ARBS

LMESHFCUc3

LMESHFALc3

LMESHFZNc3

LMESHFPBc3

LMESHFNIc3

($1 = 6.7762 Chinese yuan)

(Reporting by Muyu Xu and Dominique Patton; Editing by Subhranshu Sahu) ((muyu.xu@thomsonreuters.com; +86 010 66271298;))

More From Commodities