Market uncertainty persists, LME zinc recorded a bullish candlestick with a long upper shadow [SMM Morning Meeting Summary].

Futures Market: Last Friday, LME zinc opened at $3,581.5/mt. Initially, it moved sideways around the daily moving average. In European trading, it dipped to $3,564/mt before bulls pushed the price up to a high of $3,616/mt. Near the close, prices pulled back and finally settled up at $3,587.5/mt, up $7.5/mt or 0.21%. Trading volume decreased to 9,144 lots, and open interest increased by 2,551 lots to 251,000 lots. Last Friday, the most-traded SHFE zinc 2609 contract opened at 24,785 yuan/mt. Initially, it dipped to 24,785 yuan/mt. Then, as bulls added positions, SHFE zinc drifted higher to reach a high of 24,915 yuan/mt. After the spike, bulls took profits and exited, and prices gradually pulled back below the daily moving average. In late trading, it stabilized slightly and consolidated, finally settling up at 24,810 yuan/mt, up 25 yuan/mt or 0.10%. Trading volume increased to 42,647 lots, and open interest increased by 3,089 lots to 111,000 lots.

Macro: Russia extends its gasoline export ban to the end of 2026. The number of signatories to the AI "open weight model" open letter has grown to 50. "Big Short" adds to short positions in Micron and Nvidia. Samsung and SK Hynix sign a $950 billion deal. After nearly two weeks of clashes, the US and Iran suddenly declare a ceasefire. Saudi Arabia confirms multinational coalition strikes on Houthi forces in Yemen. Two departments clarify individual income tax rules for offshore trusts. The Supreme People's Court and the Supreme People's Procuratorate step up efforts to punish insider trading crimes.

Spot:

Shanghai: Last Friday in Shanghai, the purchasing sentiment for refined zinc was 1.98 and the selling sentiment was 2.63. Last Friday, SHFE zinc futures prices consolidated at highs. The Shanghai market had ample supply, and traders actively offered to sell. However, downstream enterprises had relatively poor orders in the off-season, and a strong wait-and-see sentiment persisted. Overall, spot trades showed mediocre performance.

Guangdong: Last Friday in Guangdong, the purchasing sentiment for refined zinc was 1.94 and the selling sentiment was 2.47. Last Friday, futures prices edged lower, but the center of futures prices continued to consolidate at highs. Meanwhile, in the off-season, end-use demand was weak, downstream enterprises' purchasing enthusiasm was mediocre, and actual transactions were mostly for rigid demand.

Tianjin: Last Friday in Tianjin, the purchasing sentiment for refined zinc was 1.93 and the selling sentiment was 2.54. Last Friday, futures prices pulled back slightly, but end-use consumption remained relatively poor. Futures prices did not reach the psychological price levels of downstream enterprises, so their purchasing enthusiasm was low. Traders kept their selling premiums largely stable. Overall, market transactions were mediocre.

Ningbo: In the morning, SHFE zinc futures prices consolidated. Last Friday in Ningbo, traders adopted a laid-back approach to selling, with overall premiums little changed from the previous day. Downstream enterprises purchased on an as-needed basis. Overall, spot deals showed mediocre performance.

Inventory: On July 24, LME zinc inventory decreased by 275 mt to 105,800 mt, a decline of 0.26%. According to SMM, as of July 23, domestic inventory increased by 1,400 mt to 270,400 mt.

Zinc price forecast: Last Friday, LME zinc recorded a bullish candlestick with a long upper shadow, with various moving averages below providing support. Uncertainty in the Middle East continues to disrupt the market, while inventories outside China continued to edge down. LME Cash-3M backwardation widened to $49.7/mt. LME zinc recorded a bullish candlestick, and prices moved sideways in a range. Last Friday, SHFE zinc recorded a bullish candlestick with no lower shadow, with various moving averages below providing support. The rise in LME drove SHFE zinc higher, but from the perspective of end-use consumption, SHFE zinc's upside room is limited, and prices continued to consolidate at highs.

Data source statement: Except for public information, other data are based on public information, market communication, and SMM's internal database model, processed by SMM, for reference only and do not constitute decision-making advice.