Guangdong Zinc Inventories Fall to Record Low, Pressure Mounts before Delivery, SMM Reports

[SMM Zinc Morning Comment] Overnight, the most-traded SHFE zinc 2607 contract opened at 25,100 yuan/mt. In early trading, SHFE zinc surged to test 25,280 yuan/mt before pulling back under pressure. It continued to weaken during the session, dipping to 25,005 yuan/mt. Toward the close, it rebounded slightly to recover part of the losses, ultimately closing down at 25,070 yuan/mt, down 80 yuan/mt or 0.32%. Trading volume decreased to 55,949 lots, and open interest fell by 933 lots to 112,000 lots.

[SMM Morning Meeting Minutes: US ADP Employment Data Falls Short of Expectations, LME Zinc Center Moves Lower] Overnight, LME zinc opened at $3,636/mt. At the beginning of the session, LME zinc fluctuated around the daily average line. As the European trading session began, bulls increased their open interest, and LME zinc oscillated higher to touch $3,658/mt. Prices at night session continued to pull back, dipping to $3,593/mt. Toward the end of the session, prices stopped falling and rebounded, slightly recovering lost ground, ultimately closing lower at $3,603/mt, down $27.5/mt, a decline of 0.76%. Trading volume decreased to 88,462 lots, and open interest increased by 3,764 lots to 231,000 lots.

On June 3, Luoping Zinc & Electricity issued an announcement stating that the Puding County Emergency Management Bureau discovered safety issues at Xiangrong Mining during an on-site inspection. Currently, Xiangrong Mining's beneficiation plant and tailings dam have ceased operations. The ore mined by the company's subsidiaries was all processed through Xiangrong Mining's beneficiation plant to produce zinc concentrates. If the subsequent remediation measures or rectification progress for Xiangrong Mining's tailings dam is slow, or if the renewal procedures for the Safety Production Permit cannot be completed smoothly, it will adversely affect the company's self-produced raw materials (primarily zinc concentrates).