LME Zinc Registered Warehouse Warrants Drop to Over One-Year Low, LME Zinc Center Moves Upward [SMM Zinc Morning Meeting Summary]

Zinc Morning Meeting Summary on March 12

Futures Market: Overnight, LME zinc opened at $2,855/mt, initially fluctuating slightly and dipping to $2,832.5/mt. It then climbed steadily, peaking at $2,920/mt near the session's end and closing higher at $2,920/mt, up $75.5/mt or 2.65%. Trading volume increased to 13,124 lots, while open interest decreased by 3,439 lots to 214,000 lots. Overnight, the most-traded SHFE zinc 2505 contract opened at 23,950 yuan/mt, initially reaching 23,950 yuan/mt before slightly falling below the daily average line. It then maintained a fluctuating trend, dipping to 23,845 yuan/mt and closing higher at 23,880 yuan/mt, up 95 yuan/mt or 0.4%. Trading volume decreased to 35,981 lots, while open interest increased by 1,715 lots to 80,639 lots.

Macro: Trump escalated tariff threats, and Canada conceded; Trump denied the economy is facing a recession and distanced himself from market sell-offs; US job vacancies exceeded expectations, fueling expectations for US Fed interest rate cuts; Ukraine agreed to a 30-day temporary ceasefire, and Trump is reportedly set to speak with Putin on Friday; the third session of the 14th National People's Congress concluded; speculation arose about a meeting between Chinese and US leaders in China next month, with the Ministry of Foreign Affairs responding; the China Securities Regulatory Commission proposed six measures to consolidate the market's recovery momentum.

Spot Market:

Shanghai: In the early session, market average prices were quoted at premiums of 20–30 yuan/mt. During the morning, the futures market first declined and then rebounded, prompting some enterprises to seize the opportunity to make just-in-time procurement at lower prices, improving market transactions compared to the previous day. Traders also raised their spot premium quotes, but overall downstream demand remained average. Some enterprises continued to hold a bearish outlook and maintained just-in-time procurement, with market activity primarily dominated by traders.

Guangdong: Spot prices were on par with Shanghai. Overall, the early session saw a noticeable decline in futures prices, with some downstream participants maintaining a bearish outlook on zinc prices and adopting a wait-and-see sentiment. Coupled with average end-use consumption, most enterprises focused on just-in-time procurement, with low purchasing enthusiasm. As futures prices rose later, market supply from traders decreased. Yesterday's decline in zinc prices slightly improved market transactions, and spot premiums increased.

Tianjin: Tianjin spot prices were at a discount of around 20 yuan/mt compared to Shanghai. Yesterday, futures prices continued to pull back, prompting some downstream participants to restock at lower prices. However, most downstream participants maintained a bearish outlook. Environmental protection-driven production restrictions in northern regions remained in place, leading to weak overall market demand. Nonetheless, traders stood firm on quotes, with most maintaining stable offers. Overall market transactions fell short of expectations.

Ningbo: Spot prices were quoted at a premium of 20 yuan/mt over Shanghai. Kirin zinc ingots continued to arrive at Ningbo Port, with some traders' zinc ingots scheduled for warehouse entry tomorrow. Yesterday, there were limited self pick-up offers in the market, and with futures prices declining in the morning, some downstream enterprises made purchases at lower prices, improving spot transactions. Spot premiums were also raised yesterday.

Social Inventory: On March 11, LME zinc inventory increased by 1,725 mt to 161,825 mt, up 1.08%. As of March 10, total zinc ingot inventory across SMM's seven tracked regions stood at 135,800 mt, down 700 mt from March 3 but up 1,800 mt from March 6, indicating an increase in domestic inventory.

Zinc Price Forecast: Overnight, LME zinc recorded a bullish candlestick, with the upper Bollinger Band forming resistance. LME zinc inventory increased by 1,725 mt to 161,825 mt, up 1.08%. Cancelled warrants reached 67,000 mt, while registered warrants fell to their lowest level in over a year. Additionally, a weaker US dollar index supported the performance of base metals, leading to a significant overnight rise in LME zinc. Meanwhile, SHFE zinc recorded a bearish candlestick overnight, with support from the 10-day moving average. Boosted by the overseas market, SHFE zinc opened higher with a gap during the night session. However, fundamental support for zinc prices remained insufficient, and SHFE zinc hovered at highs.