SMM Zinc Morning Briefing for August 7
Futures: Overnight, LME zinc opened at $3,750/mt, then maintained a fluctuating trend. It dipped to a low of $3,717.5/mt, then rallied quickly to hit a high of $3,803/mt before pulling back to near the daily moving average. It finally closed up at $3,769.5/mt, up $24/mt, or 0.64%. Trading volume increased to 20,851 lots, and open interest rose 1,843 lots to 249,000 lots. Overnight, the most-traded SHFE zinc 2609 contract opened at 25,780 yuan/mt, fluctuated around the daily moving average, hit a high of 25,960 yuan/mt during the session, dipped to 25,770 yuan/mt near the close, and finally settled up at 25,890 yuan/mt, up 305 yuan/mt, or 1.19%. Trading volume increased to 86,747 lots, and open interest rose 4,098 lots to 129,000 lots.
Macro: DRC bans exports of copper concentrates and cobalt concentrates; US initial jobless claims remain below 200,000 for the third straight week; US layoffs plunged in July while hiring plans increased slightly; Source: if inflation data is strong, Warsh would be prepared to hike rates in September; Iran plans to ban passage of hostile parties including the US and Israel through the Strait of Hormuz; Saudi intelligence shows Houthis, Iraqi militias, and Iran’s Revolutionary Guard are coordinating attacks against Saudi Arabia; the Cyberspace Administration of China initiates a cybersecurity review of Palo Alto Networks' products sold in China; DeepSeek plans to raise API service prices, with a significant increase expected; Unitree Robotics sets IPO price at 150.8 yuan, DeepSeek participates in the placement; Goldman Sachs and JPMorgan significantly increase their holdings in Zhongji Innolight's H-shares.
Spot Market:
Shanghai: Yesterday, the purchasing sentiment for refined zinc in Shanghai was 1.80, and the selling sentiment was 2.71. SHFE zinc futures prices rose notably MoM. Downstream enterprises continued to fear high prices, with weak purchase inquiries. Overall spot transactions remained need-based. Traders faced difficulty in selling, and some suppliers lowered zinc ingot premium quotations to facilitate sales.
Guangdong: Yesterday, the purchasing sentiment for refined zinc in Guangdong was 1.7, and the selling sentiment was 2.68. The notable rise in futures led to extremely weak downstream inquiry willingness. Downstream purchasing enthusiasm was suppressed by high prices and remained sluggish. Although traders' quotes remained firm, actual transactions were difficult.
Tianjin: Yesterday, the purchasing sentiment for refined zinc in Tianjin was 1.76, and the selling sentiment was 2.41. Futures continued to rally, making it hard for downstream to accept, with few inquiries. Although the export window was open and the market saw considerable purchases in the previous two days, zinc prices were too high yesterday, leading traders to reduce purchases. Traders adopted a casual selling approach, with premiums largely stable. Overall, market transactions were poor yesterday.
Ningbo: Yesterday morning, SHFE zinc futures prices rose notably. Downstream enterprises remained on the sidelines all day, with low willingness to purchase. Traders offered quotes in a laid-back manner, and overall market trading was sluggish.
Social Inventory: On August 5, LME zinc inventory decreased by 975 mt to 97,475 mt, down 0.99%; according to SMM communication, as of August 6, domestic inventory edged down slightly.
Zinc Price Outlook: Overnight, LME zinc recorded a bullish candlestick, with the upper band of Bollinger Bands providing support. Recently, LME zinc ingot inventory has continued to decline, supporting the LME Cash-3M structure staying high around $60/mt. Bulls added positions, and LME zinc's center continued to shift upward. Attention should be paid to subsequent non-farm payrolls data for guidance. Overnight, SHFE zinc recorded a bullish candlestick, with the upper band of Bollinger Bands providing support. Boosted by LME trends, SHFE zinc opened higher with a gap in the night session. On the fundamentals side, the ore tightness situation has not changed, and with the export window for zinc ingots opening, market export enthusiasm is relatively strong, overall supporting zinc prices to stay high.
Data Source Statement: Except for public information, other data are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only, and do not constitute decision-making advice.
![Night Session SHFE Zinc Opened Higher with a Gap, Expected to Stay High [SMM Zinc Morning Comment]](https://imgqn.smm.cn/usercenter/CGlrd20251217171755.jpg)
