SHFE and LME Were Both Closed Yesterday Due to the Holiday; Focus on Macro Factors and Inventory Changes [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc was closed for Easter. Overnight, SHFE zinc was closed for the Qingming Festival holiday.

Macro: Trump said Iran’s bridge power plants could be destroyed within four hours; Trump on strait transit fees: the US might as well collect them; Iranian Foreign Ministry spokesperson: the US operation to rescue pilots may have been aimed at stealing enriched uranium; vessel traffic through the Strait of Hormuz rose to the highest level since early March; China made a major breakthrough in sodium-ion battery technology; media: Foxconn was trial-producing Apple’s foldable-screen phones.

Spot:

Shanghai: Last Friday, refined zinc purchase sentiment in Shanghai was 2.12, and shipment sentiment was 2.68. Zinc prices on the morning futures session fell MoM, but downstream enterprises held some raw material inventory, and inquiries and purchases remained limited. Overall transactions did not improve. Suppliers kept offers firm, and spot premiums edged higher.

Guangdong: Refined zinc purchase sentiment in Guangdong was 1.99, and sales sentiment was 2.73. Last Friday, prices maintained a fluctuating trend and still hovered at highs overall. Some downstream buyers had made purchases earlier at lower prices and therefore still had some inventory, leaving purchase enthusiasm relatively weak. Spot transactions in the Guangdong market were poor, and spot premiums moved lower.

Tianjin: Last Friday, refined zinc purchase sentiment in Tianjin was 1.8, and shipment sentiment was 2.41. Zinc prices continued to fluctuate at highs, and downstream purchase willingness was not strong. There was a small amount of stockpiling ahead of the Qingming Festival, and market trading was mainly among traders. Traders trimmed premiums slightly to promote shipments, and overall market transactions were average.

Ningbo: With the Qingming Festival holiday approaching, downstream enterprises in Ningbo had basically completed stockpiling. Spot purchases were limited last Friday, market trading was slightly sluggish, traders were unwilling to ship at low prices, and market spot premiums continued to rise.

Inventory: As of April 2, LME zinc inventory decreased by 275 mt to 113,950 mt, down 0.24%; according to SMM market communication, as of April 2, inventory buildup had begun in China.

Zinc Price Outlook: Overnight, LME zinc was closed for Easter. The market was waiting for further signals on US-Iran tensions before Trump’s “deadline” arrived. The Middle East situation remained highly uncertain, while social inventory outside China stayed low. LME zinc was expected to hold up well, and attention should be paid to macro developments. Overnight, SHFE zinc was closed for the Qingming Festival. China’s TCs continued to decline, providing some support to zinc prices on the upside. However, spot consumption was mediocre recently, social inventory in China increased, and macro uncertainty remained elevated, so attention could be paid to today’s inventory changes in China.

Data Source Statement: Except for public information, all other data was derived by SMM based on public information, market communication, and SMM’s internal database models, and is for reference only and does not constitute decision-making advice.