Zinc Morning Meeting Minutes for August 21
Futures: Overnight, LME zinc opened at $3,709.5/mt, drifted lower initially and hit a low of $3,683.5/mt during European trading hours; then bears exited and LME zinc surged rapidly, hitting a high of $3,762.0/mt in the night session, before pulling back slightly at the tail and finally closed at $3,748.0/mt, up $34/mt, or 0.92%. Trading volume was 14,237 lots, and open interest increased 1,195 lots to 260,000 lots. Overnight, SHFE zinc 2610 contract opened at 25,480 yuan/mt, drifted lower initially and hit a low of 25,425 yuan/mt; then bulls added positions and SHFE zinc continued to rise, hitting a high of 25,620 yuan/mt; it pulled back slightly at the tail and finally closed up at 25,590 yuan/mt, up 200 yuan/mt, or 0.75%. Trading volume decreased to 82,302 lots, and open interest increased 63 lots to 138,000 lots.
Macro: Trump announced the "toughest economic action" against Iran; US Treasury Secretary Bessent: bond buyback cap may exceed $4 billion; US Fed Daly: long-term bond yield rise is a global issue; US approves early sale of winter gasoline to ease fuel price pressure; China and Switzerland announced the completion of FTA upgrade negotiations.
Spot Market:
Shanghai: In Shanghai, refined zinc purchase sentiment was 2.14 and selling sentiment was 2.64. SHFE zinc futures prices declined significantly from the previous day, and downstream enterprises conducted many price-fixing transactions. Market traders' transactions were moderate. Some suppliers continued to raise spot quotes yesterday, and market premiums subsequently rose. However, some downstream enterprises had already purchased the previous day, so spot transactions yesterday were not as good as the previous day.
Guangdong: In Guangdong, refined zinc purchase sentiment was 1.90 and selling sentiment was 2.47. Zinc prices edged up yesterday, slowing down downstream enterprises' purchasing enthusiasm. However, in Guangdong, recently the spot circulation of some delivery brands was low, coupled with continuously declining inventory, which provided some support to premiums.
Tianjin: In Tianjin, refined zinc purchase sentiment was 1.88 and selling sentiment was 2.59. Zinc prices consolidated. With the futures price below the average, some downstream enterprises made a small amount of price-fixing purchases, while most mainly did post-pricing. Actual transactions were few, and traders' selling premiums were stable. Overall market transactions yesterday improved slightly compared to the previous day.
Ningbo: In the morning, SHFE zinc futures prices maintained a fluctuating trend, and market traders' spot quotes were basically stable compared to the previous day. In the off-season, downstream orders were poor, and some enterprises had already purchased the previous day, so their purchasing enthusiasm yesterday was low. Overall spot transactions were mostly on-demand.
Social Inventory: On August 20, LME zinc inventory decreased by 650 mt to 94,400 mt, down 0.68%; according to SMM communication, as of August 20, China inventory increased by 400 mt to 270,400 mt.
Zinc Price Forecast: Overnight, LME zinc recorded a bullish candlestick, with the center of the daily candlestick continuing to move up, supported by the 20-day moving average below. Overnight LME inventory saw another decline, and the LME Cash-3M backwardation structure expanded to $132.37/mt, with increased capital concentration. Combined with the US bond repurchase ceiling potentially exceeding $4 billion, the center of LME zinc moved up. Given the high concentration of overseas funds, zinc prices are expected to fluctuate at highs. Overnight, SHFE zinc recorded a small bullish candlestick, with the center of the daily candlestick moving up, pressured by the 5-day and 10-day moving averages above, and supported by the 20-day moving average below. The LME market drove the SHFE zinc center upward, but China's social inventory accumulated again to 270,400 mt, limiting upside room.
Data Source Statement: Except for publicly available information, other data are derived by SMM based on public information, market communication, and SMM's internal database model. They are for reference only and do not constitute decision-making advice.
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