Zinc Morning Meeting Minutes, April 20
Futures: Last Friday, LME zinc opened at $3,421.5/mt. After the opening, LME zinc fluctuated upward, touching a low of $3,413/mt early in the session and reaching a high of $3,482/mt mid-session. Zinc prices then retreated from highs and fell below the daily moving average, ultimately closing up at $3,429/mt, gaining $8.5/mt or 0.25%. Trading volume rose to 12,493 lots, and open interest increased by 2,566 lots to 222,000 lots. Last Friday, the most-traded SHFE zinc 2605 contract opened at 24,190 yuan/mt. After the opening, SHFE zinc hovered at highs, touching a high of 24,395 yuan/mt early in the session and a low of 24,140 yuan/mt near the close, ultimately closing up at 24,230 yuan/mt, gaining 160 yuan/mt or 0.66%. Trading volume rose to 51,704 lots, and open interest increased by 7,161 lots to 77,141 lots.
Macro: US Fed Governor Waller took a cautious stance on interest rate cuts, warning of risks from prolonged conflicts. The US-Iran Strait of Hormuz turmoil caused market volatility. The temporary ceasefire was set to expire on Wednesday. Trump said the US and Iran would hold negotiations in Islamabad on the 20th, which Iranian media denied. A Gulf official said Trump was eager to end the war and might accept more compromises. The US Department of Energy (DOE) was to release the third batch of strategic petroleum reserves. Ukrainian Foreign Minister said Ukraine was willing to hold leader-level talks with Russia in Turkey. The National Development and Reform Commission (NDRC) said it would focus on areas such as "AI+" infrastructure this year, launching a series of actions to expand effective investment. People's Bank of China Governor Pan Gongsheng said the country would implement a moderately accommodative monetary policy and measures to boost consumption. The China Securities Regulatory Commission clarified that the National Social Security Fund and basic pension insurance funds could serve as strategic investors.
Spot market:
Shanghai: Last Friday, the refined zinc purchasing sentiment in Shanghai was 1.92, and the shipments sentiment was 2.74. Zinc futures fluctuated at highs. Downstream enterprises continued to be wary of high prices and mostly stayed on the sidelines last Friday. Spot transactions in the market were limited, and overall trading was sluggish. Shanghai traders adopted a laid-back approach to shipments pricing, and spot premiums for zinc ingots stayed low.
Guangdong: Last Friday, the refined zinc purchasing sentiment in Guangdong was 1.71, and the sales sentiment was 2.5. Last Friday, the zinc price center continued to move higher, but the number of traders making shipments in the market decreased. Spot prices for major circulating brands edged up slightly. Meanwhile, as the weekend approached, some enterprises had certain purchase needs, and spot premiums rose slightly.
Tianjin: Last Friday, the refined zinc purchasing sentiment in Tianjin was 1.74, and the shipments sentiment was 2.48. Last Friday, zinc prices continued to rally. Downstream buyers were cautious about high prices and restrained purchases. As prices had not reached downstream psychological price levels, inquiries were few. Trading was mainly among traders. The export window showed a tendency to open, and traders held prices firm when making shipments. The overall market was sluggish.
Ningbo: Due to heavy fog, port arrivals were delayed. Last Friday, few spot zinc ingot quotes were available in the Ningbo market. Some traders took the opportunity to continue raising spot premiums. However, with futures staying high, downstream alloy ingot orders were mediocre, and spot trades were sluggish last Friday.
Social inventory: On April 16, LME zinc inventory decreased by 1,925 mt to 112,825 mt, a decline of 1.68%. According to SMM communications, as of April 16, China's inventory saw a cumulative increase.
Zinc price outlook: Last Friday, LME zinc posted a bullish candlestick, with the upper Bollinger Bands forming resistance. Iran announced the opening of the Strait of Hormuz, boosting market optimism. The US dollar index softened, and zinc prices continued to rise, with the LME zinc center shifting higher. Last Friday, SHFE zinc posted a bullish candlestick, with the lower Bollinger Bands providing support. Macro sentiment improved, and the LME rally bolstered SHFE. Combined with the persistent tightness in China's zinc concentrates supply and the continued decline in zinc concentrate TCs, SHFE zinc rose in the night session and is expected to hover at highs in the short term.
Data source disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM. It is for reference only and does not constitute decision-making advice.
