Fundamentals remain supportive, LME zinc center moves higher [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc opened at $3,545/mt, briefly dipped to a session low of $3,535/mt, then rose as bulls added positions. LME zinc drifted higher throughout the session, touching a high of $3,594/mt near the close, and finally settled up at $3,579/mt, an increase of $31/mt or 0.87%. Trading volume increased to 13,260 lots, while open interest fell by 1,268 lots to 269,000 lots. Overnight, the most-traded SHFE zinc 2608 contract opened at 24,605 yuan/mt. Early in the session, bulls added positions, driving SHFE zinc quickly up to a high of 24,750 yuan/mt. Afterwards, prices consolidated, and it eventually settled up at 24,670 yuan/mt, an increase of 155 yuan/mt or 0.63%. Trading volume decreased to 56,555 lots, and open interest rose by 1,941 lots to 90,819 lots.
Macro: Nvidia denied rumors of a Kyber delay, stating its product roadmap was unaffected. US Fed Governor Waller said that more forward guidance is not necessarily better and can be foregone entirely when needed. Trump rang the opening bell at the White House, claiming the stock market would soar. Saudi Arabia cut its August selling price for Arab Light crude oil to Asia by $11/barrel.
Spot:
Shanghai: Refined zinc purchase sentiment in Shanghai was 2.02, while selling sentiment was 2.55. Yesterday, Shanghai zinc ingot inventory saw a slight buildup. There were many sellers in the market, but SHFE zinc prices fluctuated higher during the morning session. Downstream enterprise orders were weak during the off-season. Yesterday, downstream enterprise inquiries and purchases were mediocre, with overall sluggish trading in Shanghai.
Guangdong: Refined zinc purchase sentiment in Guangdong was 1.9, and sales sentiment was 2.58. Futures prices consolidated at highs, and traders' quotes were relatively stable. However, high prices dampened downstream purchasing enthusiasm, and spot premiums were flat from last Friday.
Tianjin: Refined zinc purchase sentiment in Tianjin was 186, and selling sentiment was 2.53. Futures prices continued to rebound yesterday. Downstream enterprises were cautious about purchasing at high prices and mainly stayed on the sidelines. Spot premiums for trader shipments edged down, and overall market transactions were mediocre.
Ningbo: Market traders actively offered and quoted for shipments. Yesterday, spot premiums remained weak. Downstream alloy plants had poor orders, and their willingness to inquire and purchase was low, resulting in sluggish spot transactions. Additionally, a typhoon is expected to make landfall in Zhejiang this week, which is expected to affect some zinc ingot arrivals.
Inventory: On July 6, LME zinc inventory decreased by 250 mt to 118,425 mt, a decline of 0.21%. According to SMM communication and understanding, as of July 6, SMM zinc ingot inventory across seven locations totaled 265,800 mt, down 3,500 mt from June 29, but up 900 mt from July 2.
Zinc Price Forecast: Overnight, LME zinc formed a large bullish candlestick. Routine maintenance at South Korea's YP, along with continuous destocking, provided strong bottom support for LME zinc, pushing its price center higher. Today, LME zinc is expected to mainly consolidate at highs. Overnight, SHFE zinc formed a small bullish candlestick. A tight domestic ore supply pattern persisted, with TCs continuing to decline, providing strong bottom support for zinc. However, domestic consumption remained persistently weak, with social inventory buildup creating overhead pressure for SHFE zinc. The price center edged slightly higher, and today, SHFE zinc is expected to consolidate at highs.

Data Source Statement: All data, except publicly available information, are processed by SMM based on public information, market communication, and SMM's internal database models. They are for reference only and do not constitute any decision-making advice.