SMM Zinc Morning Briefing, July 16
Futures: Overnight, LME zinc opened at $3,590.5/mt, and after a brief rise to touch an intraday high of $3,614/mt, it kept pulling back and dipped to $3,542.5/mt near the end of the session, ultimately closing down at $3,551.5/mt, down $27.5/mt or 0.77%. Trading volume increased to 11,473 lots, and open interest fell by 3,216 lots to 254,000 lots. Overnight, the most-traded SHFE zinc 2609 contract opened at 24,705 yuan/mt, then drifted lower, hitting an intraday high of 24,750 yuan/mt at the beginning of the session and a low of 24,595 yuan/mt near the end, before finally closing down at 24,615 yuan/mt, down 190 yuan/mt or 0.77%. Trading volume increased to 34,196 lots, and open interest fell 150 lots to 91,819 lots.
Macro: Trump: Iran desires a meeting, and once the situation stabilizes, oil prices will drop to $55/barrel; Iran refutes this. The US military fired a “Hellfire” missile at a tanker headed to Iran and diverted two commercial ships. US media: Trump is leaning toward expanding military operations against Iran, with options including seizing Kharg Island. Vance: Elements within Israel are manipulating US public opinion to prolong the military operation. Trump: Russia is ready to reach a deal to end the Russia-Ukraine conflict. Fed Chairman Warsh: Not satisfied with any inflation indicator. South Korean media: Samsung is secretly studying the feasibility of a US listing. China’s H1 2026 GDP grew 4.7% YoY. National Bureau of Statistics: National per capita disposable income in H1 reached 22,981 yuan. PBOC: Will increase counter-cyclical and cross-cyclical adjustments, the policy stance should not be judged solely by the volume of a single open market operation.
Spot Market:
Shanghai: Refined zinc purchase sentiment in Shanghai yesterday was 1.86, and shipment sentiment was 2.58. SHFE zinc prices rose MoM yesterday, leaving downstream enterprises cautious about high prices and showing weak purchase willingness. However, with some profit margins in the Shanghai market bills recently and the export window open, some traders showed strong purchase sentiment. The overall circulation of zinc ingot was relatively low yesterday, market spot quotes generally rose, and overall spot transactions were mostly conducted among traders.
Guangdong: Refined zinc purchase sentiment in Guangdong yesterday was 1.9, and sales sentiment was 2.5. Zinc price center rose, and after the futures price went up, downstream purchase willingness was insufficient. Overall transactions showed no improvement compared to the previous day. Currently, actual market demand is weak, downstream consumption is sluggish, and the procurement pace is slow, with transactions dominated by downstream just-in-time procurement.
Tianjin: Refined zinc purchase sentiment in Tianjin yesterday was 1.77, and shipment sentiment was 2.55. Yesterday, the futures market rebounded, rainfall increased, and demand pulled back significantly. Downstream demand was poor, with low procurement enthusiasm. Trader shipment premiums remained stable, and trading was mainly among traders. Overall market transactions were weak yesterday.
In Ningbo: Traders' quotations remained basically stable from the previous day, but SHFE zinc prices rose compared with the previous day. Downstream enterprises continued to wait and see, yesterday's purchase willingness was poor, and the overall spot market sentiment was sluggish.
Social Inventory: On July 14, LME zinc inventory decreased by 1,000 mt to 112,450 mt, a drop of 0.88%. According to SMM communication, as of July 13, China's inventory edged up.
Zinc Price Forecast: Overnight, LME zinc recorded a bearish candlestick, with support from the 20-day moving average below. Market concerns over the demand outlook arose again, and LME zinc subsequently retreated from highs. However, LME zinc ingot inventory continued to decline, and the current low inventory still provides some support for zinc ingot. It is expected that LME zinc will maintain a fluctuating trend in the short term. Overnight, SHFE zinc recorded a bearish candlestick. Influenced by LME trend, SHFE zinc also pulled back in the night session. Additionally, on the fundamentals side, China's spot consumption showed no significant improvement. It is expected that SHFE zinc will continue to maintain a fluctuating trend.
Data Source Statement: All data other than publicly available information are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only, and do not constitute any decision-making advice.
