Futures: Overnight, LME zinc opened at $3,535/mt. In early trading, LME zinc briefly fluctuated downward to a low below $3,520.5/mt. It then rose all the way and touched above $3,600/mt during the night session. Later, profit-taking funds exited, pulling the price center lower. It finally closed up at $3,546/mt, up $11.5/mt, a gain of 0.33%. Trading volume increased to 15,243 lots, while open interest fell by 562 lots to 234,000 lots. Overnight, the most-traded SHFE zinc 2607 contract opened higher with a gap at 24,885 yuan/mt. In early trading, SHFE zinc briefly rose to a high above 24,945 yuan/mt, then bulls reduced positions. SHFE zinc fluctuated downward and dipped below 24,670 yuan/mt near the close. It finally closed down at 24,730 yuan/mt, down 30 yuan/mt, a decline of 0.12%. Trading volume fell to 66,029 lots, while open interest decreased by 463 lots to 89,434 lots.
Macro: The US military launched strikes on Iran over the helicopter incident, and Iran said it would respond resolutely; Trump: may participate in rebuilding Iran, but wants to take half of its oil; Vance: the agreement may be reached in the near term, but will “definitely” be reached before the midterm elections; US media disclosed four major topics in the US-Iran nuclear talks; the EU plans to roll out the 21st round of sanctions against Russia; according to Nikkei: the Bank of Japan plans to raise interest rates to 1% at its June meeting; in the first five months, China’s total imports and exports of goods trade grew by 15.3%; the US included Alibaba, BYD, and others on a “military-related” list; the Ministry of Foreign Affairs: urges the US to stop its unreasonable suppression of Chinese enterprises.
Spot:
Shanghai: In Shanghai, refined zinc purchasing sentiment was 2.08, and shipments sentiment was 2.62. In the morning session, futures zinc prices changed relatively little from the previous day. Zinc downstream enterprises mostly maintained wait-and-see sentiment yesterday, and overall spot trades were sluggish. Traders mainly focused on shipments, and overall premiums struggled to rise.
Guangdong: In Guangdong, refined zinc purchasing sentiment was 1.89, and selling sentiment was 2.43. Zinc prices fluctuated at highs, with relatively small MoM changes in futures. Downstream maintained just-in-time procurement, and spot premiums maintained a fluctuating trend.
Tianjin: In Tianjin, refined zinc purchasing sentiment was 1.83, and shipments sentiment was 2.45. Zinc prices were mainly fluctuating. Downstream still mainly used pricing, with a small amount of just-in-time restocking. Amid sluggish transactions, traders’ shipment premiums were basically stable, and overall market transactions were average.
Ningbo: The Ningbo market had ample zinc ingot supply. Yesterday, traders’ spot quotations were basically stable, but zinc downstream enterprises had made more pricing the day before, and wait-and-see sentiment resurfaced yesterday. Overall inquiries and purchases were weak, and spot transactions showed mediocre performance.
Inventory: On June 9, LME zinc inventory decreased by 250 mt to 110,400 mt, a decline of 0.23%; according to SMM communications, as of June 8, China’s inventory increased by 1,600 mt to 265,700 mt.
Zinc Price Forecast: Overnight, LME zinc recorded a small bullish candlestick. Mounting market expectations for a US Fed rate hike within the year and the US strike on Iran kept funds in a stalemate at high levels, with LME zinc oscillating mainly and its center edging slightly higher. Overnight, SHFE zinc recorded a large bearish candlestick. Geopolitical tensions flared up again. Amid the pattern of tight ore and loose ingot supply, SHFE zinc continued to fluctuate. As of now, no turning point for social inventory destocking has been observed, and SHFE zinc edged lower. SHFE zinc is expected to fluctuate today.
Data Source Statement: All data other than public information are processed by SMM based on public information, market communication, and SMM's internal database models, and are for reference only, not constituting any decision-making advice.
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