Futures: Overnight LME zinc opened at $3,804.0/mt, drifted higher in early trading to hit a high of $3,873.5/mt, then plunged sharply near the close to a low of $3,773.5/mt, and finally settled down at $3,780.5/mt, down $21.0/mt or 0.55%. Trading volume decreased to 13,211 lots, and open interest fell by 203 lots to 270,000 lots. Overnight, the most-traded SHFE zinc 2612 contract opened at 25,800 yuan/mt, shot up in early trading to a high of 25,920 yuan/mt, then drifted lower to a low of 25,365 yuan/mt, and finally settled down at 25,455 yuan/mt, down 345 yuan/mt or 1.34%. Trading volume decreased to 98,569 lots, and open interest fell by 294 lots to 100,000 lots.
Macro: Trump: willing to work with Democrats, I have friends within the Democratic Party; Rubio denied reports that he would resign to run for president; Hegseth: impeachment does not work against President Trump, nor against me; US Fed's Barkin: gradual rate hikes remain reasonable; Iranian official said a nuclear proposal has been sent to the US via Qatar; State Council report: support Central Huijin in playing a role similar to a market stabilization fund.
Shanghai: In Shanghai, refined zinc purchase sentiment was 2.04, and sales sentiment was 2.58. In the morning session, zinc prices rebounded from lows. Some downstream buyers had made purchases at low prices the previous day, so purchase willingness weakened yesterday. Overall spot trades were mediocre, traders' spot quotes changed little from the previous day, and market premiums maintained a fluctuating trend.
Guangdong: In Guangdong, refined zinc purchase sentiment was 1.97, and sales sentiment was 2.53. Guangdong inventories have continued to decline recently, and mainstream brand quotes have been relatively firm, providing some support to spot premiums. However, as prices rose yesterday, downstream users maintained just-in-time procurement, and spot premiums remained stable.
Tianjin: In Tianjin, refined zinc purchase sentiment was 1.84, and sales sentiment was 2.43. Futures rallied, and downstream users had previously purchased at low prices or consumed inventories mainly through long-term contracts. Yesterday, most adopted a wait-and-see attitude, traders showed low willingness to sell, quotes were basically flat from the previous day, and overall market transactions were average.
Ningbo: Yesterday, few traders in Ningbo were selling, and spot quotes remained firm. However, as zinc prices rebounded notably in the morning session, downstream wait-and-see sentiment re-emerged, and overall spot trades worsened MoM.
Inventory: On November 5, LME zinc inventory decreased by 2,225 mt to 148,255 mt, down 1.48%. According to SMM communication, as of November 2, total zinc ingot inventory across seven SMM locations was 179,100 mt, down 4,200 mt from October 29 and up 4,700 mt from November 2, with domestic inventory decreasing.
Zinc price forecast: Overnight LME zinc recorded a small bearish candlestick. The bearish impact of the US midterm elections was released, and the market remained cautious ahead of the non-farm payrolls report. The center of LME zinc shifted lower. LME zinc is expected to consolidate today. Overnight SHFE zinc recorded a large bearish candlestick. Macro sentiment fluctuated, and expectations for subsequent end-use demand weakened. Support for SHFE zinc diminished, and some bull funds exited. SHFE zinc is expected to consolidate today.
Data source statement: All data other than public information are processed by SMM based on public information, market communication, and SMM's internal database models. They are for reference only and do not constitute decision-making advice.
![LME Drags SHFE Zinc Lower [SMM Zinc Morning Comment]](https://imgqn.smm.cn/usercenter/cirme20251217171754.jpg)
