Market Awaits Further Macro Guidance, LME Zinc Trading Mainly Range-Bound [SMM Morning Meeting Minutes]

SMM February 10:

Futures: Overnight, LME zinc opened at $3,371/mt. At the beginning of the session, bulls reduced positions, and LME zinc fluctuated downward, hitting a low of $3,326.5/mt during the night session. Subsequently, with bulls and bears intertwined, the price center of LME zinc moved upward, touching a high of $3,387/mt before the close, and finally closed down at $3,382/mt, down $1/mt, a decrease of 0.03%. Trading volume fell to 7,361 lots, and open interest dropped by 711 lots to 229,000 lots. Overnight, the most-traded SHFE zinc 2604 contract opened at 24,545 yuan/mt. At the beginning of the session, bears increased positions, and SHFE zinc quickly fell to a low of 24,400 yuan/mt. Later, the price center of SHFE zinc moved upward, and it fluctuated upward, touching a high of 24,590 yuan/mt before the close, and finally closed up at 24,520 yuan/mt, down 45 yuan/mt, a decrease of 0.18%. Trading volume fell to 19,994 lots, and open interest increased by 582 lots to 78,320 lots.
Macro:
The US advised US merchant ships to stay away from Iranian territorial waters; White House's Hassett predicted worsening employment; US Commerce Secretary Luttig faced bipartisan pressure to resign; Within 24 hours, the UK Prime Minister's second senior aide resigned; Shanghai, Shenzhen, and Beijing Stock Exchanges announced a package of measures to optimize refinancing; Three ministries issued preferential tax policies for re-imported goods under cross-border e-commerce export.
Spot market:
Shanghai: Yesterday, the refined zinc purchasing sentiment in Shanghai was 2.36, and the shipment sentiment was 1.89. During the last trading week before the holiday, market traders gradually began to take holidays and rest, spot quotations decreased significantly, overall quotations remained firm. However, downstream users were basically on holiday, overall spot trades were sluggish, and spot premiums fluctuated.
Guangdong: The refined zinc purchasing sentiment in Guangdong was 1.72, and the sales sentiment was 2.18. Yesterday, the zinc price center rose slightly. However, approaching the delivery date and coupled with the current low spot premiums/discounts, some traders shipping goods had sentiment to hold prices firm. Yesterday, spot premiums/discounts increased.
Tianjin: Yesterday, the refined zinc purchasing sentiment in Tianjin was 1.73, and the shipment sentiment was 2.02. Yesterday, the zinc price rebounded slightly. Downstream users were basically on holiday, with almost no inquiries. Traders also began their holidays, shipments were few, and the overall market was relatively quiet.
Ningbo: Approaching the Chinese New Year holiday, downstream manufacturers in Ningbo were basically on holiday. Yesterday, there were almost no inquiries or purchases. Market traders had few quotations, spot premiums operated at low levels, and the trading atmosphere was sluggish.
Social inventory: On February 9, LME zinc inventory decreased by 675 mt to 106,925 mt, a decrease of 0.63%. According to SMM communication, as of February 9, domestic inventory increased.
Zinc price forecast: Overnight, LME zinc recorded a small bullish candlestick. While the market awaited a series of US economic data, a weaker US dollar continued to support nonferrous metals. Similarly, continued destocking on the LME provided support for LME zinc. LME zinc is expected to fluctuate mainly. Overnight, SHFE zinc recorded a small bearish candlestick. Fundamentally, domestic inventory continued to accumulate, and downstream users were basically on holiday. Fundamentals dragged on SHFE zinc, and the price center of SHFE zinc moved downward.

Data source statement: Except for public information, other data are processed by SMM based on public information, market communication, and relying on SMM's internal database model, for reference only and do not constitute decision-making advice.