US Dollar Extends Decline, Boosting LME Zinc [SMM Morning Meeting Summary]

SMM Zinc Morning Meeting Minutes, September 10

Futures: Overnight, LME zinc opened at $4,012/mt. In early trading, LME zinc consolidated along the daily average line. During European trading hours, it dipped to a low of $3,990/mt. Subsequently, bulls added positions, lifting LME zinc higher, and near the close it touched a high of $4,065/mt, finally settling up at $4,064/mt, up $43/mt, or 1.07%. Trading volume fell to 13,305 lots, while open interest increased by 1,267 lots to 264,000 lots. Overnight, the most-traded SHFE zinc 2610 contract opened at 27,690 yuan/mt. In early trading, SHFE zinc edged down to a low of 27,615 yuan/mt. Subsequently, bulls added positions, and SHFE zinc drifted higher, touching a high of 27,835 yuan/mt near the close, finally settling up at 27,820 yuan/mt, up 82 yuan/mt, or 0.31%. Trading volume fell to 80,202 lots, while open interest increased by 303 lots to 158,000 lots.

Macro: The US Treasury Department announced a buyback of $6 billion in long-term bonds; expectations for rate hikes by the European Central Bank and the Bank of England intensified; the World Platinum Investment Council expects the platinum market to shift to oversupply this year; the World Gold Council reported that global gold ETFs recorded the second-largest single-month inflow in history in August; Trump said the US-Iran war would "end immediately" after the midterm elections; Iran said it would respond to US attacks with escalated strikes; it was reported that DeepSeek has hired CITIC Securities to prepare for an IPO.

Shanghai: In the Shanghai region, refined zinc purchasing sentiment was 1.78, and selling sentiment was 2.46. In the morning session, zinc ingot prices consolidated at highs, continuing to dampen downstream purchasing sentiment. Yesterday, downstream enterprises remained largely on the sidelines, and overall spot market activity was sluggish. Spot trades were mostly between traders, and market premiums remained weak.

Guangdong: In the Guangdong region, refined zinc purchasing sentiment was 1.63, and selling sentiment was 2.35. Yesterday, zinc prices remained above 27,000 yuan/mt, fluctuating at highs. Spot transactions in the Guangdong market were thin. Downstream enterprises were also affected by high prices, with orders performing poorly, purchasing enthusiasm low, and the market largely wait-and-see.

Tianjin: In the Tianjin region, refined zinc purchasing sentiment was 1.54, and selling sentiment was 2.34. Excessively high zinc prices suppressed downstream operations, and downstream purchasing enthusiasm was low. With futures prices too high, traders were not active in selling, and some traders waited for delivery. Yesterday, the overall market saw almost no transactions.

Ningbo: Futures zinc prices consolidated at highs. Yesterday, downstream manufacturers in Ningbo mostly remained on the sidelines, with overall inquiries limited. Traders sold in a laid-back manner, and spot quotes were basically flat from the previous day. Market trading remained sluggish.

Inventory: On September 9, LME zinc inventory increased by 300 mt to 115,675 mt, up 0.26%. According to SMM communication, as of Monday this week (September 7), total zinc ingot inventory across seven SMM regions stood at 222,100 mt, down 28,900 mt from August 31 and down 10,700 mt from September 3. Domestic inventory decreased.

Zinc price forecast: Overnight, LME zinc recorded a large bullish candlestick. Rising energy prices fueled inflation expectations, and the US dollar index continued to decline. Nonferrous metals broadly rose, and with LME capital concentration still high, the center of LME zinc continued to shift upward. LME zinc is expected to fluctuate at highs today. Overnight, SHFE zinc recorded a small bullish candlestick. The US dollar was under pressure, nonferrous metals broadly rose, and with supply tight, SHFE zinc continued to move higher, boosted by LME. SHFE zinc is expected to consolidate at highs today.

Data source statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM's internal database models, and are for reference only, not constituting decision-making advice.