LME vs SHFE The LME INV drop in the previous 30 days is matched almost to the tonne by the SHFE inventory increase. Feels to me like GLEN and other parties were using the chinese new year break to reorient the warehouse stocks so that more of it is in China where demand will be given the smelter cut backs and enviro restrictions.
Now that chinese new year is over, steel produciton will start to ramp up in China from now to end of summer and the SHFE zinc INV should start to drop too. We'll see if I'm right. There is always the possibility that GLEN has gauged the market's demand + new & existing mine supply + increase in incoming scrap supplies spot on and opened up exactly the right amount of shuttered mine capacity to create a perfectly balanced market. In which case we will see the combined total of the LME + SHFE inventories stay pretty static. However ... I very much doubt this is the case ... I think the INV level on both exchanges will continue to go down until late summer.