Futures: Last Friday, LME zinc opened at $3,757/mt, briefly dipped to a low of $3,752/mt in early trading, then drifted higher all the way, hitting a high of $3,840/mt in the night session, before pulling back slightly but still maintained a fluctuating trend at a high level, eventually closing up at $3,822.5/mt, up $74.5/mt, or 1.99%, with trading volume increasing to 16,686 lots and open interest up 1,747 lots to 262,000 lots. Last Friday, the most-traded SHFE zinc 2610 contract opened at 25,950 yuan/mt, shot up to a high of 26,120 yuan/mt in early trading, then consolidated near the daily average line, dipping to a low of 25,895 yuan/mt during the session, finally closing up at 25,985 yuan/mt, up 275 yuan/mt, or 1.07%, with trading volume declining to 77,729 lots and open interest increasing by 5,006 lots to 144,000 lots.
Macro: Trump said the solution to the 40 trillion US debt problem lies in growth, and did not instruct Bessent to intervene in the bond market; Trump said the shift to an "economic war" against Iran does not mean US military options are limited; Iran's president called for ending the war with the US while in a position of strength, saying Iran should break free from a "neither war nor peace" state; it was reported that Iran has been invited to join the Mecca Mutual Defense Agreement jointly established by Saudi Arabia, Turkey, and Pakistan; Iran's parliamentary committee approved collecting service fees from vessels passing through the Strait of Hormuz, and the bill still needs a full vote; Canada refused to finalise a trade deal with the US and will impose a reciprocal 50% tariff on the US; Trump adjusted his investment portfolio in June, selling stocks like Meta and buying Berkshire Hathaway; the Ministry of Finance said national securities trading stamp duty revenue from January to July was 186.4 billion yuan, up 99.2% YoY; multiple banks issued notices raising the individual discount interest ceiling at the same bank to 5,000 yuan.
Spot:
Shanghai: On last Friday, the purchasing sentiment for refined zinc in Shanghai was 1.98, and the selling sentiment was 2.7. In the morning, SHFE zinc futures prices rose significantly MoM, downstream enterprises had a strong fear of high prices, plus they had purchased at previous lows via price fixing, so many factories had some raw material inventory. Overall market transactions were sluggish on last Friday, traders faced sluggish shipments, and market premiums subsequently edged down.
Guangdong: On last Friday, the purchasing sentiment for refined zinc in Guangdong was 1.85, and the selling sentiment was 2.5. Zinc prices rose notably on last Friday, downstream enterprises gradually showed wait-and-see sentiment, procurement pace slowed down, spot transactions turned weaker, and spot premiums declined.
Tianjin: On last Friday, the purchasing sentiment for refined zinc in Tianjin was 1.85, and the shipping sentiment was 2.53. Futers surged, and downstream enterprises had mostly finalized price fixing in the previous few days, so there were fewer inquiries on last Friday. Traders' shipping premiums remained stable, and overall market transactions were worse than the previous day.
Ningbo: Recently, zinc prices in the futures market rose significantly, and downstream enterprises feared high prices, barely making any purchases or inquiries, leading to a marked weakening in overall market sentiment. Some suppliers lowered spot quotes, and the market premium slightly weakened.
Inventory: On August 21, LME zinc inventory decreased by 1,275 mt to 93,125 mt, down 1.35%; according to SMM communication, as of August 20, China inventory increased by 400 mt to 270,400 mt.
Zinc Price Forecast: Last Friday, LME zinc recorded a large bullish candlestick, with moving averages below providing support for prices. LME inventory continued to decline, and the ex-China backwardation structure remained large. Meanwhile, recent concerns over US Treasury buybacks weighed on the US dollar, the US dollar index moved lower, and LME zinc surged to a four-year high, with short-term prices expected to stay high and fluctuate. Last Friday, SHFE zinc recorded a bullish candlestick with a long upper shadow, supported by the moving averages below. The strong performance of the overseas market lifted SHFE zinc, but China inventory and consumption capped price gains, and the market is expected to consolidate at highs today.
Data Source Statement: Other than public information, all data are derived from public information, market communication, and SMM internal database models, processed by SMM, for reference only, and do not constitute decision-making advice.
![SHFE zinc prints a bullish candlestick, and is expected to consolidate at highs in the short term [SMM zinc morning comment].](https://imgqn.smm.cn/usercenter/tAyyp20251217171754.jpg)
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