US dollar strengthens LME zinc center slightly sinks [SMM Morning Meeting Summary]

March 3 Zinc Morning Meeting Summary

Futures: Overnight, LME zinc opened at $3,327/mt. During the day, LME zinc fluctuated around the daily average line. Near the night session, it quickly surged to a high of $3,388/mt before bulls took profits and exited, causing LME zinc to fall, finally closing at $3,307.5/mt, down $0.5/mt or 0.02%. Trading volume increased to 16,398 lots, while open interest decreased by 151 lots to 226,000 lots. Overnight, the most-traded SHFE zinc 2604 contract opened at 24,890 yuan/mt. At the beginning of the session, SHFE zinc consolidated around the daily average line. Subsequently, as bulls reduced positions, SHFE zinc rapidly declined, with its center moving down to 24,600 yuan/mt, finally closing at 24,525 yuan/mt, down 65 yuan/mt or 0.26%. Trading volume decreased to 94,800 lots, and open interest fell by 198 lots to 95,432 lots.

Macro: Iran claims the Strait of Hormuz has been closed, but the US Central Command denies this; US Secretary of State: Measures will be announced to alleviate rising oil prices; US appeals court rejects Trump administration's request to delay tariff refunds; Trump does not rule out sending ground troops to Iran, stating he doesn't care about polls; Trump: A real wave of strikes is coming soon; Uzbekistan halts gold exports, with no set date for resumption; Macron announces an increase in nuclear warheads to reshape European nuclear deterrence.

Spot Market:

Shanghai: In the Shanghai region, the purchase willingness for refined zinc was 1.92, and the shipment willingness was 2.55. The inventory of zinc ingots in the Shanghai market continued to grow, with traders actively quoting prices. Overall, spot premiums remained low. Downstream enterprises are gradually resuming production, but overall transactions were still moderate yesterday.

Guangdong: In the Guangdong region, the purchase willingness for refined zinc was 1.62, and the selling willingness was 2.14. Overall, downstream purchasing enthusiasm in the Guangdong market remained low yesterday. Due to the current low premiums and discounts, some delivery brands quoted higher prices, but actual transactions were difficult, leading to a slight decline in spot premiums and discounts under normal trading conditions.

Tianjin: In the Tianjin region, the purchase willingness for refined zinc was 1.73, and the shipment willingness was 2.05. Yesterday, zinc prices were in the doldrums. Downstream buyers made limited inquiries, mainly driven by rigid demand. Large factories still relied on long-term contracts. Traders' shipment premiums slightly stabilized, and overall transactions were moderate.

Ningbo: With zinc ingots continuing to arrive, the inventory of zinc ingots in the Ningbo market also increased. Many traders were offering shipments. Although downstream enterprises have gradually resumed work recently, due to sufficient raw material inventories from pre-holiday purchases, the purchase willingness remained low yesterday, and there was no significant improvement in transactions.

Social Inventory: On March 2, LME zinc inventory decreased by 575 mt to 96,775 mt, a drop of 0.59%. According to SMM, as of March 2, domestic inventory once again significantly increased by more than 30,000 mt.

Zinc Price Forecast: LME zinc recorded a four-day losing streak, with the 40-day moving average providing support. Geopolitical risks in the Middle East increased, and a stronger US dollar pressured non-ferrous metals, causing LME zinc to retreat after a rapid rise, shifting its center lower. SHFE zinc recorded one bearish candlestick overnight, with the 20-day moving average forming resistance above and the 40-day moving average providing support below. SHFE zinc fluctuated within a range overnight; on the fundamentals side, social inventory increased by over 35,000 mt as consumption has not yet recovered, limiting upside room. Low TCs for ore and high prices of precious metals due to geopolitical risks provided bottom support.

Data Source Statement: Apart from publicly available information, other data are derived from public information, market communication, and SMM's internal database model, processed by SMM for reference only and do not constitute decision-making advice.