SMM Zinc Morning Briefing, August 3
Futures: Last Friday, LME zinc opened at $3,615/mt and slowly drifted higher before falling sharply in the afternoon session to touch $3,600/mt. LME zinc then rebounded and consolidated, hitting a high of $3,648.5/mt near the close. It ended up $30.5/mt or 0.84% at $3,640/mt. Trading volume increased to 13,538 lots, and open interest rose by 1,803 lots to 246,000 lots. Last Friday, the most-traded SHFE zinc 2609 contract opened at 25,010 yuan/mt and drifted higher early in the session, touching a high of 25,140 yuan/mt. It then pulled back to the daily moving average, dipped to 24,950 yuan/mt, and subsequently consolidated around the average. The contract ended up 175 yuan/mt or 0.7% at 25,065 yuan/mt. Trading volume fell to 70,468 lots, and open interest increased by 4,444 lots to 115,000 lots.
Macro: South Korean stocks posted their largest single-day gain on record last Friday; foreign net buying hit a record. Japan's finance minister will announce joint Japan-US action to curb yen depreciation. US media say OpenAI may postpone its IPO to next year. OPEC+ agrees to raise oil output targets again from September. Fed Chairman Warsh considers reducing the frequency of annual policy meetings. Trump cancels strikes on Iran, says US-Iran talks to start. State Administration for Market Regulation launches price compliance guidance for the PV industry. Three major telecom operators to stop card sales via third-party internet channels. Four departments jointly issue 22 measures to improve governance of financial institutions.
Spot Market:
Shanghai: Last Friday, refined zinc purchasing sentiment in Shanghai was 1.9, and selling sentiment was 2.42. SHFE zinc futures prices fluctuated at highs. Downstream orders were weak in the off-season, and most downstream enterprises stayed on the sidelines, leaving the overall spot market quite sluggish. Meanwhile, traders offered limited cargoes at month-end, and overall spot quotes last Friday were basically stable compared with last Thursday.
Guangdong: Last Friday, refined zinc purchasing sentiment in Guangdong was 1.85, and selling sentiment was 2.42. The futures price center moved higher, triggering notable fear of high prices among downstream buyers. Demand was even more sluggish due to high prices, trading atmosphere was thin, and spot premiums hovered at low levels.
Tianjin: Last Friday, refined zinc purchasing sentiment in Tianjin was 1.85, and selling sentiment was 2.37. Futures prices continued to consolidate at highs. Downstream buyers were cautious amid fear of high prices, with few inquiries. At month-end, traders also limited their sales, and selling premiums remained largely stable. Overall market trading was weak last Friday.
Ningbo: Last Friday morning, SHFE zinc futures prices edged up WoW. Downstream enterprises continued to stay on the sidelines due to fear of high prices. Overall trading was sluggish. Traders in Ningbo quoted casually, and spot premiums were basically stable compared with last Thursday.
Social inventory: On July 30, LME zinc inventory decreased by 900 mt to 99,800 mt, a decline of 0.89%. According to SMM market communication, as of July 30, China’s inventory edged lower.
Zinc price forecast: Last Friday, LME zinc formed a bullish candlestick, with the upper Bollinger Band providing resistance. LME zinc ingot inventory continued to slide below 100,000 mt, the LME zinc 0-3 backwardation widened to $65.63/mt, and increased long positions by bulls continued to boost the zinc price trend. LME zinc posted a three-day winning streak, with the overall center clearly shifting upward. Last Friday, SHFE zinc formed a bullish candlestick, with the upper Bollinger Band providing resistance. Recently, domestic zinc concentrate disruptions have persisted, with the overall tight supply-demand situation unchanged. In August, China’s zinc concentrate TCs continued to decline, generally supporting SHFE zinc to hold up well. Attention should be paid to future zinc ingot export performance.
Data source statement: Except for publicly available information, other data are derived from SMM’s internal database model based on public information, market communication, and processed by SMM. They are for reference only and do not constitute decision-making advice.
![China zinc concentrate TCs continue to decline, SHFE zinc night session rises [SMM Zinc Morning Comment]](https://imgqn.smm.cn/usercenter/ipTIN20251217171755.jpg)
