SMM, October 8:
Futures: Overnight, LME zinc opened at $3,772/mt, briefly rose to a high of $3,828.5/mt, then pulled back rapidly as bulls cut positions, hitting a low of $3,706/mt near the close, and finally settled down at $3,710/mt, down $59/mt or 1.49%. Trading volume increased to 19,991 lots, and open interest fell by 2,461 lots to 258,000 lots. Overnight, the most-traded SHFE zinc 2611 contract opened at 25,960 yuan/mt, briefly rose to a high of 25,985 yuan/mt, then declined all the way as bulls cut positions, hitting a low of 25,670 yuan/mt near the close, and finally settled down at 25,685 yuan/mt, down 375 yuan/mt or 1.44%. Trading volume increased to 68,944 lots, and open interest fell by 2,115 lots to 115,000 lots.
Macro: US Fed's Waller: Further rate hikes are still needed, but they do not need to be consecutive; US, Ukrainian, and European officials will hold talks on Friday to propose new plans to break the deadlock in the Russia-Ukraine conflict; Trump bought $25 million of Meta stock and $5 million of SpaceX debt instruments in August; the People's Bank of China released its policy stance on the yuan exchange rate.
Spot market:
Shanghai: Buying sentiment for refined zinc in Shanghai was 2.06, and selling sentiment was 2.43. On the first trading day after the National Day holiday, some traders were still on leave. Overall, traders in east China quoted firmly, and spot premiums in some markets were higher than before the holiday. Overall premiums rose MoM, but downstream users remained somewhat cautious, and spot transactions were mostly need-based yesterday.
Guangdong: Buying sentiment for refined zinc in Guangdong was 1.85, and selling sentiment was 2.55. On the first trading day after the National Day holiday, zinc price center pulled back from pre-holiday levels. Traders and downstream enterprises in Guangdong restocked to some extent, and spot trades became more active, driving spot premiums in Guangdong to edge up yesterday.
Tianjin: Buying sentiment for refined zinc in Tianjin was 1.81, and selling sentiment was 2.23. After the holiday, futures pulled back. Downstream users had stockpiled heavily before the holiday and still held inventory, so they mainly consumed existing stocks. With limited spot supply in the market, premiums edged up, and overall market trading was moderate.
Ningbo: On the first trading day after the holiday, few traders were selling. Downstream enterprises made need-based inquiries and restocked after the holiday. Overall spot transactions were moderate, and traders raised spot offers, with overall premiums higher than before the holiday.
Inventory: On October 8, LME zinc inventory decreased by 325 mt to 127,425 mt, down 0.25%. According to SMM communication, as of October 8, total zinc ingot inventory across seven SMM regions was 205,000 mt, up 2,200 mt from September 28 and up 11,900 mt from September 30. Domestic inventory increased.
Zinc price forecast: Overnight LME zinc recorded a bearish candlestick, with the market still digesting rate hike expectations. The US dollar index remains high, and rising oil prices have sparked market concerns. Under macro pressure, nonferrous metals broadly declined, and LME zinc broke below support. LME zinc is expected to consolidate on a subdued note today. Overnight SHFE zinc recorded a bearish candlestick, with weak macro sentiment outside China dragging SHFE zinc lower. Although zinc concentrates remain at historically low levels, the post-National Day zinc ingot inventory buildup also weighed on zinc prices. SHFE zinc is expected to remain in the doldrums 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 and do not constitute decision-making advice.
