U.S. December Retail Sales Unexpectedly Stagnate, LME Zinc Center Shifts Upward [SMM Morning Meeting Minutes]

SMM February 11:

Futures: Overnight, LME zinc opened at $3,367.5/mt. At the beginning of the session, bulls and bears intertwined, and LME zinc experienced wide swings around the daily average line, touching a low of $3,351/mt. Subsequently, bulls increased their positions, driving LME zinc higher during the night session. It reached a high of $3,405/mt towards the session close, finally settling up at $3,398/mt, an increase of $14/mt, or 0.47%. Trading volume increased to 8,008 lots, and open interest rose by 1,328 lots to 231,000 lots. Overnight, the most-traded SHFE zinc 2604 contract opened at 24,410 yuan/mt. Initially, SHFE zinc briefly moved lower, touching a low of 24,370 yuan/mt. Afterwards, bulls increased their positions, lifting the price center of SHFE zinc. SHFE zinc fluctuated upward, reaching a high of 24,540 yuan/mt by the session close. The closing price was also the intraday high, with the contract finally settling up at 24,540 yuan/mt, an increase of 35 yuan/mt, or 0.14%. Trading volume decreased to 17,804 lots, while open interest increased by 515 lots to 79,245 lots.
Macro:
US December retail sales unexpectedly stalled; US Fed officials downplayed the urgency of interest rate cuts; White House trade advisor refuted claims of worsening employment; US Commerce Secretary stated the US dollar exchange rate has been artificially elevated for years; Trump suggested potentially sending another carrier strike group to the Middle East if US-Iran negotiations fail; European Commission accepted Volkswagen's price commitments for China-made pure electric vehicles; China will accelerate the promotion and application of AI in the tender and bid sector.
Spot Market:
Shanghai: Yesterday, the purchase willingness for refined zinc in the Shanghai area was 1.8, while the shipment willingness was 2.26. As the Chinese New Year break approaches, few traders were making shipments in the market yesterday. Overall, spot premiums held steady. Downstream users were mostly on holiday, with almost no inquiry or purchase willingness. Overall market transactions were sluggish.
Guangdong: The purchase willingness for refined zinc in the Guangdong area was 1.7, and the sales willingness was 2.06. Yesterday, zinc prices continued to fluctuate rangebound. Few traders were making shipments, and offers were scarce. Meanwhile, end-user enterprises gradually entered the holiday period, leading to weaker market demand and sluggish spot trades. Premiums and discounts remained unchanged yesterday.
Tianjin: Yesterday, the purchase willingness for refined zinc in the Tianjin area was 1.71, and the shipment willingness was 1.95. Yesterday, zinc prices dropped back slightly. Downstream users had largely entered the Chinese New Year break cycle, and traders also began their holidays successively, resulting in few shipments. The overall market was relatively quiet.
Ningbo: Yesterday, few traders offered quotes in the Ningbo market, and there was some divergence in the overall offers. However, as downstream users entered the holiday cycle, there were almost no inquiries or purchases yesterday, creating a sluggish market atmosphere.
Social Inventory: On February 10, LME zinc inventory decreased by 175 mt to 106,750 mt, a drop of 0.16%. According to SMM communication and understanding, domestic inventory increased as of February 9.
Zinc Price Forecast: Overnight, LME zinc recorded a small bullish candlestick. US December retail sales unexpectedly stalled, and geopolitical risks persist, which is positive for non-ferrous metals. The price center of LME zinc moved higher, and it is expected to fluctuate at highs today. Overnight, the most-traded SHFE zinc contract recorded a small bald-headed bullish candlestick. Fundamentally, contradictions are not prominent. Downstream users are mostly on holiday, but ore supply remains relatively tight. SHFE zinc is primarily influenced by macro sentiment and is expected to fluctuate.

Data Source Statement: Except for public information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and do not constitute decision-making advice.