Ongoing Middle East Tensions Continued to Disrupt the Market, with LME Zinc Fluctuating at Lows [SMM Zinc Morning Meeting Summary]

Zinc Morning Meeting Summary for March 26

Futures: Overnight, LME zinc opened at $3,053/mt. After the opening, LME zinc fluctuated downward and touched an intraday low of $3,037.5/mt. It then continued to rebound from lows and hit a high of $3,090.5/mt near the close, finally ending up at $3,081/mt, up $42.5/mt, or 1.4%. Trading volume increased to 11,757 lots, and open interest rose by 1,278 lots to 209,000 lots. Overnight, the most-traded SHFE zinc 2605 contract opened at 23,010 yuan/mt. After the opening, SHFE zinc maintained a fluctuating trend. During the session, SHFE zinc touched a high of 23,075 yuan/mt, then fell to a low of 22,965 yuan/mt, before returning to fluctuate near the daily average line. It finally closed up at 23,040 yuan/mt, up 105 yuan/mt, or 0.46%. Trading volume fell to 37,150 lots, and open interest decreased by 1,076 lots to 101,000 lots.

Macro: The US continued to urge Ukraine to give up Donbas in exchange for security guarantees; the US Secretary of the Interior said that a visit to Venezuela brought back $100 million in physical gold; Putin signed a decree restricting Russia's bullion exports starting from May; Iran said that neither a ceasefire nor negotiations were feasible at the current stage; China accelerated the establishment of a long-term care insurance system.

Spot Market:

Shanghai: Yesterday, refined zinc purchase sentiment in Shanghai was 2.26, and shipment sentiment was 2.65. Yesterday morning, zinc prices on the futures market maintained fluctuations. Traders' purchase sentiment improved somewhat yesterday, but downstream enterprises mostly purchased based on immediate needs. Spot premiums struggled to rise, and overall spot trading saw mediocre performance.

Guangdong: Yesterday, refined zinc purchase sentiment in Guangdong was 2.11, and sales sentiment was 2.6. Yesterday, traders' quotations were basically flat from the previous day. Downstream buyers had made more low-price purchases earlier, and were currently mainly restocking for rigid demand. Overall transactions in the spot market were relatively average, and premiums were stable yesterday.

Tianjin: Yesterday, refined zinc purchase sentiment in Tianjin was 2.01, and shipment sentiment was 2.51. Yesterday, zinc prices continued to rise. Downstream buyers were cautious about purchasing at high prices, and there were fewer inquiries yesterday. Traders' shipment premiums continued to edge down, and overall market transactions were average.

Ningbo: Yesterday, there were not many traders making shipments in the market, and spot premiums changed little. Downstream enterprises were not very active in making inquiries yesterday, and spot transactions did not improve. Attention should be paid to subsequent consumption.

Social Inventory: On March 24, LME zinc inventory fell by 625 mt to 116,745 mt, down 0.53%; according to SMM communication and understanding, as of March 23, China inventory declined.

Zinc Price Outlook: Overnight, LME zinc posted a bullish candlestick, with the lower Bollinger Bands providing support. The situation in the Middle East continued to disturb the market. News emerged that the US was seeking a ceasefire in the Iran war, but the market remained largely cautious. Zinc prices fluctuated at lows, and the overall center remained stable. Overnight, SHFE zinc recorded a bullish candlestick, with support from the five-day moving average below. There were no further macro disruptions for the time being. On the fundamentals side, China zinc concentrate TCs struggled to rise, while China zinc ingot inventory was also gradually destocking, and SHFE zinc maintained a fluctuating trend in the night session.

Data source statement: Except for public information, all other data is processed and derived by SMM based on public information, market communication, and the SMM internal database model, and is for reference only and does not constitute decision-making advice.