The US and Iran are about to sign a peace agreement, LME zinc stops falling and rebounds [SMM Zinc Morning Meeting Summary]

SMM Zinc Morning Meeting Minutes, June 15

Futures: Last Friday, LME zinc opened at $3,526.5/mt. After the open, LME zinc briefly maintained a fluctuating trend, dipping to $3,511.5/mt during the session, then began to fluctuate upward, touching a high of $3,590.5/mt near the close. It ultimately closed up at $3,583/mt, up $57.5/mt, a gain of 1.63%. Trading volume fell to 14,399 lots, and open interest increased by 3,983 lots to 242,000 lots. Last Friday, the most-traded SHFE zinc 2608 contract opened at 24,500 yuan/mt. After the open, SHFE zinc fluctuated at highs, dipping to 24,490 yuan/mt early in the session and touching a high of 24,690 yuan/mt intraday. It ultimately closed up at 24,670 yuan/mt, up 275 yuan/mt, a gain of 1.13%. Trading volume increased to 35,747 lots, and open interest increased by 498 lots to 77,808 lots.

Macro: The US banned foreign entities from accessing Fable 5 and Mythos 5; SK Hynix sought a Nasdaq listing; the US and Iran reached a memorandum of understanding, to be signed on Friday; Israel struck Lebanon again, and Iran canceled retaliation at the last minute; six ministries jointly issued the Guidelines for Data Classification and Grading of Financial Information Services; 11 departments promoted scaled application of new energy heavy-duty trucks; industry sources revealed that reforms to taxes and fees such as “road maintenance fees” were under study; ChangXin Technology’s IPO registration application was approved by the CSRC.

Spot Market:

Shanghai: Last Friday, refined zinc purchasing sentiment in Shanghai was 2.08, and selling sentiment was 2.62. On Friday morning, zinc prices in the futures market rebounded from lows. Downstream enterprises had made more buy-the-dip purchases earlier, and wait-and-see sentiment resurfaced, with fewer inquiries and purchases. Overall spot transactions weakened. Traders in the market held quotes firm, and overall spot premiums were basically stable.

Guangdong: Last Friday, refined zinc purchasing sentiment in Guangdong was 2, and selling sentiment was 2.49. The price center in the futures market rose, while end-user purchasing demand was generally weak. Traders faced significantly greater difficulty in shipments. Overall market trading was sluggish on Friday, with low activity, and transactions clearly weakened from the previous day. Spot premiums were flat versus last Thursday.

Tianjin: Last Friday, refined zinc purchasing sentiment in Tianjin was 2.11, and selling sentiment was 2.54. Zinc prices rebounded. Downstream buyers conducted large-scale pricing and stockpiling on Thursday, and purchasing sentiment was not high on Friday. Traders had a mindset of holding prices firm, pushing premiums higher, and overall market transactions weakened.

Ningbo: On Friday morning, the futures market rebounded from lows. Traders’ quotes in the market were basically flat versus last Thursday, but downstream zinc enterprises had made more buy-the-dip purchases last Thursday. With sufficient raw material inventory at plants, overall transactions on Friday weakened MoM.

Social Inventory: On June 11, LME zinc inventory fell by 1,725 mt to 107,750 mt, a decline of 1.58%; according to SMM communications, as of June 11, China’s inventory edged down slightly.

Zinc price forecast: Last Friday, LME zinc recorded a bullish candlestick, breaking through multiple daily moving averages. As the US and Iran are about to sign a peace agreement, market macro sentiment improved accordingly. Non-ferrous metal prices generally rose, and LME zinc also stopped falling and rebounded, with its center shifting upward. Last Friday, SHFE zinc recorded a bullish candlestick, with the 40-day moving average above forming resistance. The LME trend boosted SHFE zinc, and SHFE zinc continued to rise in the night session. On the fundamentals side, China's zinc concentrate TCs dropped to negative levels, once again hitting a record low. However, consumption is in the off-season, downstream demand is relatively weak, and the fundamentals show a tug-of-war between longs and shorts, keeping SHFE zinc at high levels.

Data source statement: All data other than publicly available information are processed by SMM based on public information, market communication, and internal SMM database models, and are for reference only, not constituting any decision-making advice.