Futures: Overnight, LME zinc opened at $3,332.5/mt, initially surged to a high of $3,360/mt, then fluctuated considerably around the daily average. Entering the night session, LME zinc fluctuated downward, touching a low of $3,293/mt, before rebounding slightly at the close, ending down 0.53% at $3,305.5/mt, a decrease of $17.5/mt. Trading volume decreased to 83,901 lots, while open interest increased by 471 lots to 233,000 lots. Overnight, the most-traded SHFE zinc 2603 contract opened at 24,785 yuan/mt, initially climbed to a high of 24,980 yuan/mt, then fluctuated downward as bulls reduced positions and exited the market, touching a low of 24,725 yuan/mt. It maintained a fluctuating trend at lows until the close, ending down 0.46% at 24,770 yuan/mt, a decrease of 115 yuan/mt. Trading volume decreased to 85,471 lots, while open interest decreased by 2,186 lots to 77,033 lots.
Macro: US January ADP employment data fell short of expectations; US Bureau of Labor Statistics: Non-farm payrolls will be released on February 11, CPI data rescheduled to February 13; US Treasury maintains bond issuance strategy unchanged; First day of new round of Russia-Ukraine-US talks ends, Zelenskyy: Expects prisoner exchange soon; Iranian Foreign Minister confirms: Iran-US nuclear talks to be held in Oman on Friday; President Xi Jinping holds phone conversation with US President Trump; Xi Jinping holds video meeting with Russian President Putin; Central Bank: Focus on supporting key areas including domestic demand expansion, technological innovation, and small and medium-sized enterprises.
Spot:
Shanghai: Yesterday, the purchase sentiment for refined zinc in the Shanghai region was 1.9, while the sales sentiment was 2.54. During the morning session, zinc futures fluctuated. Traders in the Shanghai market resumed holding prices firm, with the premium over the average price continuing to widen. However, as downstream enterprises began holidays, purchase willingness was relatively poor yesterday. Spot trades were sluggish, with overall spot transactions mainly occurring among traders.
Guangdong: Yesterday, the purchase sentiment for refined zinc in the Guangdong region was 1.86, while the sales sentiment was 2.34. Zinc prices maintained a fluctuating trend yesterday, but constrained by numerous downstream end-user enterprises taking holidays recently, market purchase enthusiasm was relatively low. Actual transactions for all brands required discounts, and spot premiums/discounts continued to decline.
Tianjin: Yesterday, the purchase sentiment for refined zinc in the Tianjin region was 1.83, while the sales sentiment was 2.19. Zinc prices continued to fluctuate at highs yesterday. Most downstream enterprises were on holiday, resulting in few purchases, primarily through point pricing, and transactions were sluggish. Traders held spot premiums largely stable. Overall market transactions were average.
Ningbo: Downstream enterprises in the Ningbo market are about to go on holiday, with previous zinc ingot stockpiling basically completed. Yesterday, downstream inquiries and purchases were nearly nonexistent. Traders quoted offers passively, with spot premiums holding stable at lows. The trading atmosphere remained sluggish.
Inventory: On February 4, LME zinc inventory decreased by 775 mt to 108,200 mt, a drop of 0.71%. According to SMM communication, as of this Monday (February 2), domestic zinc ingot inventory increased.
Zinc Price Forecast: Overnight, LME zinc recorded a four-day losing streak, with support from the 20/60-day daily average lines. Although US ADP employment data fell short of expectations, non-farm payroll and CPI data were postponed to next week, leaving uncertainties. Coupled with ongoing tensions in some international regions, LME zinc fluctuated. Overnight, SHFE zinc recorded a small bullish candlestick, pressured by the 5/10-day daily average lines above and supported by the 20/60-day daily average lines below. Affected by domestic end-user holidays, spot market trading remained sluggish across regions, keeping upward pressure on zinc prices. However, the central bank emphasized efforts to support key areas such as domestic demand expansion, technological innovation, and small and medium-sized enterprises, providing some macro-level support. SHFE zinc is expected to maintain a fluctuating trend at highs.
Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and not intended as decision-making advice.
![Macro tailwinds coupled with sluggish spot market, SHFE zinc hovers at highs [SMM Zinc Morning Comment]](https://imgqn.smm.cn/usercenter/tAyyp20251217171754.jpg)
