BEIJING, July 19 (Reuters) - Shanghai zinc jumped by the
daily limit of 6 percent on Thursday and hit a one-week top
following a report that the Chinese central bank plans to boost
liquidity in the banking sector, while falling inventories and a
weaker yuan also underpinned the base metal.
The People's Bank of China plans to introduce incentives
that will boost the liquidity of commercial banks, helping them
to expand lending, Reuters reported early on Thursday.
Industry sources at Chinese metals firms have complained of
tight liquidity this year.
Zinc supply is also looking tighter, with Chinese production
falling year-on-year in June and Shanghai Futures Exchange zinc
stocks ZN-STX-SGH at their lowest level in 10 years.
London Metal Exchange zinc posted its biggest daily jump in
almost a year on Wednesday. The metal "benefited from a
short-covering rally, after the recent sell-off had seen short
positions bolstered significantly," ANZ said in a note.
FUNDAMENTALS
* SHANGHAI ZINC: The most-traded September zinc contract on
the ShFE touched its highest since July 10 and was up
4.4 percent at 21,325 yuan ($3,165.97) by the mid-session
interval. It gained 0.8 percent on Wednesday.
* LME ZINC: Three-month zinc on the LME rose as much
as 2.1 percent to $2,655 a tonne, following a 3.5 percent gain
in the previous session, and was last up 0.3 percent at $2,607.
It declined 23 percent between early June and Monday's one-year
low amid fears of oversupply.
* CHINA: China's zinc output fell 5 percent year-on-year to
475,000 tonnes in June, the National Bureau of Statistics said
on Wednesday.
* TECHNICALS: Indicating near-term supply tightness in zinc,
LME cash zinc traded at a premium of $31 a tonne to the
three-month price CMZN0-3, up from an $8.50 premium on July
12.
* OTHER METALS: All other base metals were trading higher
with the exception of London nickel, which edged down
0.3 percent. Copper added 0.7 percent in Shanghai and 0.2
percent in London, but zinc's sister metal lead was the next
best performer, jumping 1.8 percent in Shanghai.
* COPPER: Three senior executives at Jiangxi Copper Co
, one of China's biggest copper producers,
have left their roles, the company said in a stock exchange
filing on Wednesday, in a major managerial shake-up at the
state-run firm.
* In the spot market, the onshore yuan opened at
6.7227 per dollar and fell to a low of 6.7424 per dollar at one
point, the weakest since July 28, 2017.
