Futures: Overnight, LME zinc opened at $3,830/mt and initially moved sideways around the daily average, hitting a low of $3,814/mt before drifting higher and reaching a high of $3,893.5/mt in the night session. It pulled back slightly from the high at the end of the session, finally closing up at $3,884.5/mt, up $57.5/mt or 1.50%. Trading volume increased to 13,812 lots, while open interest decreased by 912 lots to 263,000 lots. Overnight, the most-traded SHFE zinc 2610 contract opened at 26,140 yuan/mt and briefly dipped to a low of 26,050 yuan/mt before bulls added long positions, pushing prices to drift higher above the daily average and reach a high of 26,425 yuan/mt. Some bulls exited at the end of the session, causing prices to pull back slightly from the high, and it finally closed up at 26,375 yuan/mt, up 305 yuan/mt or 1.17%. Trading volume decreased to 103,000 lots, while open interest increased by 11,542 lots to 164,000 lots.
Macro: Trump stated that all mines in the international waters of the Strait of Hormuz have been removed and/or detonated. Russian media reported that the US and Iran have reached a consensus on the terms of a ceasefire agreement, including free navigation in the Strait of Hormuz. Rubio was reportedly told by foreign counterparts that the US currently will not launch new military strikes against Iran. Iran and Oman plan to establish a mutually agreed safe maritime passage in the Strait of Hormuz. US Fed's Collins said that in the absence of sustained evidence of inflation pulling back, it is appropriate to raise interest rates "as soon as possible." Canada imposed reciprocal tariffs on the Trump administration in response. Jack Ma and Joe Tsai increased their holdings in Alibaba's Hong Kong-listed shares.
Spot:
Shanghai: Yesterday, the purchase willingness for refined zinc in the Shanghai region was 1.9, and the shipment sentiment was 2.66. In the morning, SHFE zinc futures prices continued to rise to around 26,000 yuan/mt, and downstream enterprises intensified their fear of high prices. Combined with no improvement in month-end terminal orders, the market remained mostly wait-and-see yesterday, resulting in sluggish spot trades overall.
Guangdong: Yesterday, the purchase willingness for refined zinc in the Guangdong region was 1.73, and the sales sentiment was 2.55. Futures prices fluctuated around 26,000 yuan/mt. Downstream enterprises lacked purchase enthusiasm and mostly adopted a wait-and-see approach. Enterprises with procurement needs mainly made just-in-time procurement. Market transactions were sluggish, and spot premiums lacked upward momentum, remaining flat from the previous day.
Tianjin: Yesterday, the purchase willingness for refined zinc in the Tianjin region was 1.75, and the shipment sentiment was 2.46. Futures consolidated at highs. Downstream enterprises were relatively unaccepting of prices and barely made inquiries yesterday, mainly consuming inventory. Traders' shipment premiums remained stable. Overall market transactions were poor yesterday.
Ningbo: Congestion at the Ningbo port affected some zinc ingot arrivals, but downstream factory orders did not improve. Coupled with continuously rising futures prices, downstream enterprises' purchase willingness remained weak today. The overall spot atmosphere was sluggish, with traders quoting passively. Spot premiums were stable WoM.
Inventory: On August 25, LME zinc inventory increased by 1,800 mt to 95,050 mt, up 1.93%. According to SMM market communication, as of August 24, China inventory decreased by 2,100 mt to 268,300 mt.
Zinc price forecast: Overnight, LME zinc recorded a bullish candlestick, supported by various moving averages below. Recent easing of concerns over geopolitical conflicts in the Middle East, combined with a pullback in geopolitical risks and the US dollar index, boosted the price center of LME zinc. Overnight, SHFE zinc recorded a large bullish candlestick, supported by various moving averages below. Boosted by the LME, the price center of SHFE zinc rose, hitting a new high since February this year. However, China's end-use demand has yet to show significant signs of recovery, and upward pressure on zinc prices remains. Driven by the LME, SHFE zinc is expected to stay high and consolidate on a strong note in the near term.
Data Source Disclaimer: Except for publicly available 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.
![SHFE zinc hit a new high since February this year, and is expected to continue its consolidation pattern at highs in the short term [SMM zinc morning comment]](https://imgqn.smm.cn/usercenter/qdibi20251217171755.jpg)
