Futures: Overnight, LME zinc opened at $3,585/mt. Early in the session, LME zinc edged down to a low of $3,568/mt, then rose all the way above the daily average line, reaching a high of $3,650/mt during the night session. Toward the end of the session, the rally paused and pulled back slightly but still hovered at highs, ultimately closing up at $3,631/mt, up $49/mt or 1.37%. Trading volume increased to 129,000 lots, and open interest decreased by 2,690 lots to 227,000 lots. Overnight, SHFE zinc 2607 contract opened at 25,065 yuan/mt. Early in the session, SHFE zinc edged down to a low of 25,060 yuan/mt. Then bulls added positions, pushing SHFE zinc above the daily average line to a high of 25,355 yuan/mt. Subsequently, amid a tug-of-war between longs and shorts, SHFE zinc moved sideways near 25,300 yuan/mt, ultimately closing up at 25,250 yuan/mt, up 265 yuan/mt or 1.06%. Trading volume decreased to 89,945 lots, and open interest increased by 7,039 lots to 114,000 lots.
Macro: Iranian media reported that information exchanges between Iran and the US had been interrupted for several days; Trump responded: this is fake news; Rubio: an Iran deal could be reached today, tomorrow, or next week; explosions were heard this morning on Qeshm Island in southern Iran, and Iran attacked a US military base in Kuwait; Hezbollah rejected a "partial ceasefire" with Israel, with both sides continuing to exchange attacks; Fed Chairman Warsh appointed two advisors, both conservative figures; the State Council issued the "15th Five-Year Plan for Accelerating Agricultural and Rural Modernization"; Tiger Brokers: starting June 12, new position opening and position adding transactions for all products will be suspended for existing investor accounts within China; Unitree Robotics' STAR Market IPO review status changed to "registration submitted."
Spot:
Shanghai: Yesterday, the refined zinc purchase sentiment in the Shanghai area was 1.92, and the selling sentiment was 2.54. In the morning, futures zinc prices maintained a fluctuating trend. Some downstream buyers had purchased the day before, and yesterday the market was mostly in wait-and-see mode. Overall spot zinc ingot trading performance was poor. Traders mainly sold, and overall spot premiums ran at low levels.
Guangdong: Yesterday, the refined zinc purchase sentiment in the Guangdong area was 1.76, and the selling sentiment was 2.5. The zinc price center moved higher, while downstream consumption in the Guangdong area was sluggish. End-user factories held certain inventory, and purchase willingness at high prices was low. Traders had poor sales, and spot premiums edged down.
Tianjin: Yesterday, the refined zinc purchase sentiment in the Tianjin area was 1.74, and the selling sentiment was 2.36. Zinc prices mainly fluctuated. Downstream purchase sentiment was low, with restocking mainly driven by rigid demand. Traders' selling premiums remained stable. The market was relatively quiet, and overall trading was mediocre.
Ningbo: There were many traders selling in the market. Yesterday, overall spot quotes remained stable compared to the previous day. In the morning, futures zinc prices fluctuated. Downstream alloy factories in Ningbo made few inquiries, and overall spot trading was sluggish.
Inventory: On June 2, LME zinc inventory remained flat at 113,300 mt; according to SMM communication, as of June 1, China's inventory increased by 3,700 mt to 264,600 mt.
Zinc price outlook: Overnight, LME zinc posted a bullish candlestick, surging to a three-year high, with the 5/60-day moving averages providing support below. Geopolitical risk-aversion sentiment rose due to Middle East tensions, compounded by news of Iran attacking a U.S. military base, sustaining short-term safe-haven support. Additionally, uncertain tariff prospects supported non-ferrous metals' upward movement, and zinc prices are expected to fluctuate at highs in the short term. Overnight, SHFE zinc posted a shaven-bottom bullish candlestick, with all moving averages providing support. Domestically, low ore TCs provided downside support for zinc prices, but downstream consumption entering the off-season, weak rigid demand, and elevated inventory levels constrained upside room. In the short term, SHFE zinc is expected to hold up well following LME, but sustained one-directional rise remains difficult due to consumption constraints.
Data source disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.
![SHFE Zinc Rose Driven by LME, Recording a Bullish Candlestick with No Lower Shadow Overnight [SMM Zinc Morning Comment]](https://imgqn.smm.cn/usercenter/eyxqF20251217171756.jpg)
