US Dollar Index Remains High, Continuing to Pressure LME Zinc as Price Center Shifts Lower [SMM Zinc Morning Meeting Summary]

SMM Zinc Morning Meeting Minutes, September 16

Futures: Overnight, LME zinc opened at $3,798.5/mt. After the open, LME zinc consolidated around the daily average line. During midday trading, LME zinc drifted lower, hitting a low of $3,734/mt, then rebounded all the way, touching a high of $3,835/mt near the close, and finally settled up at $3,831.5/mt, up $27/mt or 0.71%. Trading volume decreased to 18,052 lots, while open interest rose by 2,411 lots to 267,000 lots. Overnight, the most-traded SHFE zinc 2611 contract opened at 26,220 yuan/mt. In early trading, SHFE zinc touched a high of 26,290 yuan/mt, then drifted lower after the open, hitting a low of 26,025 yuan/mt during the session. It subsequently rebounded from the low to near the daily average line, and finally settled up at 26,170 yuan/mt, up 25 yuan/mt or 0.1%. Trading volume increased to 56,441 lots, while open interest rose by 907 lots to 124,000 lots.

Macro: UK media: The Bank of England plans to stop selling long-term government bonds; US House Speaker: AI company executives are expected to head to the White House within the next week; Hassett: Trump and I respect whatever decision Warsh makes; US Senate Majority Leader: "Willing to discuss" an export ban on diesel; Saudi Arabia reportedly canceled some European clients' crude oil cargoes scheduled for September loading; Oil loading operations at Yanbu, Saudi Arabia's largest Red Sea port, have been suspended; Bessent: The rise in bond yields is due to "global issues"; Oman's foreign minister held a phone discussion with the US Secretary of State on regional developments; Iranian Foreign Minister Araghchi will visit China on September 16.

Spot Market:

Shanghai: Yesterday, purchasing sentiment for refined zinc in Shanghai was 2.26, and selling sentiment was 2.6. Yesterday, zinc ingot prices on the futures market continued to fall to 26,000 yuan/mt. Downstream enterprises began actively pricing and purchasing from the previous night, and overall spot trades were relatively good yesterday morning. Traders actively offered and sold, and spot premiums in the east China market continued to rise.

Guangdong: Yesterday, purchasing sentiment for refined zinc in Guangdong was 1.98, and selling sentiment was 2.5. Yesterday, zinc prices moved lower, and downstream buyers increased purchases at lower prices, driving improved market transactions. Meanwhile, traders selling goods quoted relatively firm prices, supporting further gains in premiums yesterday.

Tianjin: Yesterday, purchasing sentiment for refined zinc in Tianjin was 1.97, and selling sentiment was 2.48. Yesterday, the futures market continued to fall to downstream psychological price levels. Starting from the previous night, downstream buyers successively placed orders and priced, and combined with pre-National Day stocking demand, overall purchasing sentiment rebounded noticeably. Traders actively sold and raised premiums accordingly, and market transactions improved yesterday.

Ningbo: Recently, zinc prices on the futures market have declined significantly. Downstream enterprises began actively pricing and purchasing from the previous night, and overall market trading was moderate. Traders continued to raise spot quotes, and market premiums rose MoM.

Social inventory: On September 15, LME zinc inventory increased by 1,675 mt to 111,225 mt, up 1.53%; according to SMM communication, as of September 14, China's inventory edged up.

Zinc price forecast: Overnight, LME zinc recorded a bullish candlestick, with the upper Bollinger Band forming resistance. Market risk-off sentiment persisted, and the high US dollar index pressured zinc prices. Additionally, as China's export shipments to delivery warehouses gradually emerged, LME zinc ingot inventory showed an accumulating trend. During the session, LME zinc pulled back to a near four-week low, with its overall center continuing to shift downward. It is expected to maintain a fluctuating trend in the short term. Overnight, SHFE zinc recorded a bearish candlestick, with the lower Bollinger Band providing support. Recently, the domestic ore shortage has persisted, weakening smelters' production enthusiasm. However, downstream consumption has yet to show a trend-based improvement, leaving both bullish and bearish factors in fundamentals. SHFE zinc is expected to continue consolidating at lows in the short term.

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.