Weak Non-Farm Payrolls Data; LME Zinc Posted a Bullish Candlestick [SMM Morning Meeting Minutes]

Futures: Last Friday, LME zinc opened at $3,240.0/mt, dipped below $3,221.0/mt early in the session, then its center fluctuated upward mildly. After entering the night session, it accelerated higher and touched above $3,343.0/mt, finally closing up at $3,323.0/mt, up $93/mt, a gain of 2.88%. Trading volume increased to 121,000 lots, while open interest fell by 516 lots to 219,000 lots. Last Friday, the most-traded SHFE zinc 2604 contract opened at 24,350 yuan/mt. Early in the session, SHFE zinc fluctuated downward and dipped below 24,220 yuan/mt; later, bears reduced positions, and its center moved higher, touching above 24,370 yuan/mt, finally closed at 24,330 yuan/mt, up 70 yuan/mt, a gain of 0.29%. Trading volume decreased to 58,655 lots, while open interest fell by 932 lots to 84,384 lots.

Macro: US nonfarm payrolls in February unexpectedly fell by 92,000, and the unemployment rate edged up to 4.4%; Khamenei’s son was elected Iran’s new Supreme Leader; Trump: Without my approval, he won’t stay in office for long; Trump: There are currently no plans to deploy ground troops in Iran, and the possibility of Kurdish forces joining the war has been ruled out; multiple oil-producing countries in the Middle East implemented production cuts, and multiple oil storage facilities in Iran were attacked; Iran’s president: Unconditional surrender is absolutely impossible, and Iran will no longer attack neighboring countries unless those countries launch attacks on Iran first; the US government ruled out having the Treasury trade oil futures and will not discuss tapping the Strategic Petroleum Reserve; the PBOC increased its gold holdings for the 16th consecutive month; Ministry of Finance: In 2026, fiscal policy will continue to adhere to a more proactive stance; Director of the National Development and Reform Commission: Together with the Ministry of Finance, the People’s Bank of China, and other departments, a national-level M&A fund will be established; CSRC Chairman Wu Qing: Strictly investigate and severely punish behaviors such as riding hot topics, hyping concepts, and manipulation.

Spot:

Shanghai: Last Friday, refined zinc purchase sentiment in Shanghai was 2.14, and shipment sentiment was 2.65. In the morning, zinc prices in futures continued to move lower. Downstream enterprises continuously fixed prices on dips, but actual purchases were limited. Overall spot transactions improved only marginally. Traders actively offered shipments, and spot discounts narrowed slightly.

Guangdong: Last Friday, refined zinc purchase sentiment in Guangdong was 2.07, and sales sentiment was 2.13. Overall, the center of zinc prices moved down noticeably. Downstream fixed-price purchases on dips increased. Although enterprises’ current pace of picking up goods was average, spot market trading picked up slightly, and spot premiums rose.

Tianjin: Last Friday, refined zinc purchase sentiment in Tianjin was 2.03, and shipment sentiment was 2.29. Zinc prices pulled back, and downstream enterprises restocked on dips at an appropriate time, mainly via fixed pricing, with limited pick-up of goods. Traders’ shipment premiums held slightly steady, and overall market transactions improved compared with the previous day.

Ningbo: There were many traders making shipments in the market last Friday. In the morning, futures zinc prices declined. Although downstream buyers placed pricing orders, as some enterprises still held certain raw material inventory, the improvement in market transactions was limited. Overall spot premiums remained at low levels last Friday.

Inventory: On March 6, LME zinc inventory decreased by 25 mt to 94,975 mt, a decline of 0.03%. According to SMM market communication, as of this Thursday (February 5), domestic zinc ingot inventory increased. According to SMM market communication, as of March 4, domestic inventory increased slightly.

Zinc Price Outlook: Last Friday, LME zinc posted a bullish candlestick, with the 20-day moving average above acting as resistance. As weak US non-farm payrolls data to some extent boosted market expectations for a US Fed interest rate cut, the US dollar index softened and LME zinc rose. Last Friday, SHFE zinc posted a bearish candlestick, with the 5/40-day moving averages above acting as resistance. Domestic consumption had not fully recovered, and coupled with the continued increase in domestic social inventory recently, zinc’s rise remained capped.

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