GLOBAL ZINC & LEAD WRAP: Cif Shanghai zinc premium drops on closed import window; Europe, US premiums flat

The closure of the arbitrage window between London and Shanghai prompted a drop in Chinese zinc premiums in the week to Tuesday June 2, while broad stagnancy in European and US demand kept premiums firm, although some market participants anticipate that demand could further weaken in the coming months.

  • Cif Shanghai premium dipped as demand diminished in line with arbitrage window’s close 
  • Southeast Asian premium dropped followed the trend two weeks ago in Taiwan as many Japanese and Indian cargoes were quoted there 
  • Lack of liquidity, demand keeps Europe premiums steady
Spot appetite has diminished in China with closing of arbitrage window; SEA premiums drop
A negative import arbitrage between London Metal Exchange and Shanghai Futures Exchange zinc prices has dampened buying appetite for imported zinc and the cif Shanghai zinc premium slipped accordingly this week.
Fastmarkets’ assessment of the zinc special high grade (SHG), min 99.995%, ingot premium, cif Shanghai fell to $70-90 per tonne on Tuesday, compared with $80-90 per tonne a week earlier.
The corresponding zinc min 99.995% ingot premium, in-warehouse Shanghai stood at $90-100 per tonne this Tuesday, unchanged over the past week.

The import loss over the...

Published

Anna Xu

Karen Ng

Hassan Butt

Rijuta Dey Bera

June 03, 2020

17:52 GMT

Shanghai, New York, Singapore, London