LME Structural Risks Remain, LME Zinc Maintains Fluctuating Trend [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc opened at $3,845/mt, initially climbed to a high of $3,876/mt, then gradually pulled back, dipping to $3,831.5/mt during the night session before ending slightly higher at $3,863.5/mt, up $12.5/mt or 0.32%. Trading volume fell to 11,772 lots, and open interest decreased by 231 lots to 263,000 lots. Overnight, the most-traded SHFE zinc 2611 contract opened lower with a gap at 26,440 yuan/mt, initially edged down to 26,360 yuan/mt, then consolidated higher to touch 26,500 yuan/mt, fluctuating around the daily average before pulling back slightly at the close to settle at 26,435 yuan/mt, down 140 yuan/mt or 0.53%. Trading volume fell to 54,036 lots, and open interest decreased by 3,369 lots to 132,000 lots.

Macro: Trump signed a "morally binding" AI document and renamed AI to SI; Fed's Williams: another rate hike this year is possible but there is no need to rush; OpenAI launched all-day autonomous agent Dots to challenge Meta Muse; the US plans to release 40 million barrels from the Strategic Petroleum Reserve to ease fuel price pressure; OpenAI's annual recurring revenue is reportedly approaching $70 billion; the Ministry of Finance and two other departments: implement interest subsidy policies for residential home purchase loans.

Spot:

Shanghai: Today, refined zinc procurement sentiment in Shanghai was 1.88, and selling sentiment was 2.45. With the National Day holiday approaching, downstream enterprises have largely completed stockpiling. Procurement sentiment was weak today, and some traders were also off. Overall spot trades weakened MoM, and spot premiums were little changed from yesterday.

Guangdong: Refined zinc procurement sentiment in Guangdong was 1.75, and selling sentiment was 2.55. With the holiday approaching, downstream enterprises with stockpiling needs have largely finished. Spot market transactions in Guangdong were moderate today. Although some brands quoted higher prices recently, actual transactions were relatively difficult, and spot premiums were flat from yesterday.

Tianjin: Refined zinc procurement sentiment in Tianjin was 1.68, and selling sentiment was 2.14. Futures consolidated, and downstream made only small just-in-time procurement. Overall inquiries and pricing were limited. With the holiday approaching, traders were not active in selling. Due to limited market supply, premiums edged up, and overall market trading sentiment was weak.

Ningbo: On the eve of the National Day holiday, downstream enterprises are about to shut down for the holiday. Today they remained on the sidelines, and overall market trading was sluggish. Traders quoted prices casually, and spot premiums edged up.

Inventory: On September 29, LME zinc inventory increased by 75 mt to 123,550 mt, up 0.06%. According to SMM, as of September 28, domestic inventory continued to decline to around 203,000 mt.

Zinc price forecast: Overnight, LME zinc recorded a small bullish candlestick, with prices consolidating below the middle Bollinger Band. The US dollar index held up well, pressuring LME zinc; however, structural risks in the LME persist, and LME zinc maintained a fluctuating trend. Overnight, SHFE zinc recorded a small bearish candlestick, with the middle Bollinger Band above acting as resistance. In the night session, SHFE zinc opened lower with a gap due to the influence of the LME, but domestic ore supply remained tight, and low TCs provided support to prices, so SHFE zinc continued to consolidate at highs.

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.