Last Friday, the US dollar fell, and LME zinc rose sharply [SMM Morning Meeting Summary]

September 21 Zinc Morning Meeting Minutes

Futures: Last Friday, LME zinc opened at $3,880/mt. In early trading, LME zinc quickly dipped to $3,873/mt before consolidating around the daily average line. During European trading hours, increased long positions pushed LME zinc sharply higher. Entering the night session, LME zinc consolidated at highs, and in late trading it surged to touch a high of $3,947/mt, finally closing at $3,940.5/mt, up $59/mt, or 1.52%. Trading volume decreased to 12,532 lots, and open interest decreased by 832 lots to 261,000 lots. Last Friday, the SHFE zinc 2611 contract opened at 26,675 yuan/mt. In early trading, SHFE zinc briefly touched a high of 26,760 yuan/mt before pulling back under pressure. Prices then continued to decline, dipping to 26,590 yuan/mt before increased long positions pushed SHFE zinc higher in a choppy session. In late trading, it consolidated at highs and finally closed at 26,745 yuan/mt, up 180 yuan/mt, or 0.68%. Trading volume decreased to 51,652 lots, and open interest increased by 4,133 lots to 134,000 lots.

Macro:

Spot market:

Shanghai: Refined zinc purchasing sentiment in Shanghai was 1.96, and selling sentiment was 2.60. Last Friday, more traders in the Shanghai market were selling, and with futures zinc prices rebounding, downstream enterprises showed weaker buying interest. Overall spot trades weakened MoM, spot premiums changed little, and trading was mostly between traders.

Guangdong: Refined zinc purchasing sentiment in Guangdong was 1.85, and selling sentiment was 2.62. Zinc prices continued to rise, and spot market transactions in Guangdong weakened. Although trader quotes remained firm last Friday, high prices to some extent suppressed downstream enterprises' buying interest, and market trading turned subdued.

Tianjin: Refined zinc purchasing sentiment in Tianjin was 1.91, and selling sentiment was 2.44. Futures rallied, and downstream enterprises had largely completed earlier stockpiling, so inquiries were few. Circulating spot supply decreased, and traders held prices firm, with spot premiums edging up. Overall market transactions were poor.

Ningbo: Trader quotes remained firm. Last Friday, overall spot premiums edged up, but futures zinc prices rebounded MoM, and with weaker dip-buying earlier this week, downstream enterprises showed reduced buying interest. Overall spot trading was mediocre.

Social inventory: On September 17, LME zinc inventory increased by 1,050 mt to 115,300 mt, up 0.92%. According to SMM communication, as of September 17, domestic inventory decreased by 9,000 mt to 213,500 mt.

Zinc price forecast: Last Friday, LME zinc recorded a large bullish candlestick, with the daily candlestick center moving significantly higher. The KDJ gap widened upward, and the middle Bollinger Band provided support below. Last Friday, bears reduced positions and exited, the US dollar weakened, and nonferrous metals broadly rose. Although LME zinc inventory increased, overall inventory levels remained low. Combined with lingering supply concerns from the South Korean smelter accident, zinc prices fluctuated at highs. Last Friday, SHFE zinc recorded a small bullish candlestick, with the daily candlestick center edging higher, supported by the middle Bollinger Band below. Last Friday, supported by bulls adding positions, zinc prices drifted higher. China's zinc ingot exports, combined with increased stockpiling ahead of the upcoming double festival, pushed social inventory down to 213,000 mt. Coupled with low TCs, zinc prices have strong support at the bottom.

Data source statement: Except for public 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.