US Dollar Remains at Annual High, LME Zinc Declines [SMM Morning Meeting Notes]

Spot Market Fundamentals
Shanghai: In the early session, the market quoted spot premiums of 80-100 yuan/mt against the average price, with few follow-up quotes. In the second trading session, ordinary domestic zinc was quoted at premiums of 380-400 yuan/mt against the SHFE 2501 contract, while Baiyin was quoted at a premium of 380 yuan/mt against the SHFE 2501 contract. High-end brand Shuangyan had no quotes against the SHFE 2501 contract. On the last trading day of the year, many market traders closed their accounts, and downstream buyers also conducted inventory checks and went on holiday, resulting in limited purchasing activity. Overall, market transactions were average, and spot zinc premiums slightly declined.  
Tianjin: By the midday close, Xinzi was quoted at premiums of 320-370 yuan/mt against the SHFE 01 contract, Chihong at 330-380 yuan/mt, Xikeng had no quotes, and Bailing also had no quotes. High-end brand Zijin was quoted at premiums of 420-440 yuan/mt against the SHFE 01 contract. The futures market mainly fluctuated within a narrow range. Many traders closed their accounts, leading to fewer quotes on Tuesday. Downstream buyers primarily restocked as needed, and overall market transactions were average.
Guangdong: In the first session, suppliers quoted premiums of 530-540 yuan/mt for Qilin, Mengzi, and Jilong. On Tuesday, fewer traders were active in the market, and some showed sentiment to stand firm on quotes. However, with zinc prices fluctuating at highs, downstream buyers mainly purchased as needed. In the second session, Jilong was quoted at a premium of 530 yuan/mt against the online price. Overall, market transactions on Tuesday were sluggish, the price spread between futures contracts slightly expanded, and spot premiums slightly increased.
Ningbo: In the first session, Honglu-v was quoted at a premium of 390 yuan/mt against the SHFE 2501 contract. In the second session, traders' quotes remained unchanged from the previous session. Recently, some traders continued to pre-sell domestic zinc ingots expected to arrive this week or next week. After the New Year holiday, the market may see an increase in arrivals. On Tuesday, spot premiums continued to decline, but as year-end inventory checks halted downstream procurement, market transactions remained sluggish.
Zinc Price Forecast for Today: On Tuesday, LME zinc recorded a large bearish candlestick, with LME inventory decreasing by 2,975 mt to 234,900 mt, a drop of 1.25%. The US dollar remained strong, with market expectations of fewer interest rate cuts and positive policy outlooks following the inauguration of the new president. The US dollar index continued to hover near a two-year high. Meanwhile, domestic PMI recorded 50.1, still in expansion territory, but concerns lingered over a potential pullback in domestic demand. LME zinc's center shifted downward, and it is expected to fluctuate today. On Tuesday night, SHFE zinc was closed due to the New Year holiday.