Shanghai zinc plunges over 3% after LME loss

BEIJING — Shanghai zinc fell more than three 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 one percent to $2,704 per ton 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.

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

Cash zinc has moved from a premium to a discount against the three-month London Metal Exchange (LME) contract for the first time since September, suggesting shortages in nearby supply are easing.

US 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.

The dollar stayed near a sixweek high against a basket of currencies as fresh worries over US-Sino trade tensions and global growth pushed investors towards the safety of the greenback.

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.

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 secondlargest ore supplier, may decline after a fatal dam accident at a Vale mine. —