LME Zinc Retreated after Rapid Rise, SHFE Zinc Maintained Fluctuating Trend [SMM Morning Meeting Summary]

SMM Zinc Morning Meeting Minutes for August 31
Futures: Last Friday, LME zinc opened at $3,889.5/mt, drifted higher to a high of $3,955/mt, then pulled back quickly to a low of $3,859.5/mt, and finally closed at $3,879.5/mt, down $9/mt or 0.23%. Trading volume increased to 20,691 lots, and open interest increased by 64 lots to 261,000 lots. Last Friday, SHFE zinc 2610 contract opened at 26,240 yuan/mt, dipped to 26,145 yuan/mt in early trading, then rebounded in choppy trade to a high of 26,400 yuan/mt, and finally closed at 26,375 yuan/mt, down 110 yuan/mt or 0.42%. Trading volume increased to 112,400 lots, and open interest decreased by 335 lots to 164,000 lots.
Macro: Fed Chairman Warsh: It is necessary to be convinced that underlying inflation is moving toward the target; otherwise, there is still work to do. US forces attacked islands in southern Iran; Iran's Revolutionary Guard fired missiles at a US military base in Jordan; the US hopes to widen the main shipping lane in the Strait of Hormuz by mid-September; Iran's Foreign Ministry condemned the new US economic threat and called on all countries not to implement it; Iran's President: Oman agreed that the Strait of Hormuz should be managed according to the Islamabad Memorandum of Understanding.
Shanghai: Last Friday, buying sentiment for refined zinc in Shanghai was 1.82 and selling sentiment was 2.56. SHFE zinc futures prices stayed high in the morning, and fear of high prices among downstream enterprises persisted. The market remained mostly wait-and-see last Friday, actual traded volumes were relatively limited, the overall trading atmosphere was subdued, and traders generally had difficulty selling.

Guangdong: Last Friday, buying sentiment for refined zinc in Guangdong was 1.7 and selling sentiment was 2.45. Although zinc prices edged lower, they still consolidated at highs. Downstream buying interest was low, traders sold poorly, market transactions showed no improvement, and spot premiums held steady.

Tianjin: Last Friday, buying sentiment for refined zinc in Tianjin was 1.65 and selling sentiment was 2.31. Futures continued to stay high. Downstream wait-and-see sentiment was strong, some rigid demand was mainly based on deferred pricing, traders were not active in selling, and premiums held steady. Overall market transactions were poor last Friday.

Ningbo: A typhoon was about to arrive last Friday, and Ningbo port had already been closed. Coupled with high futures prices, downstream enterprises continued to wait and see. Market traders were also reluctant to sell, and overall market trading was subdued.

Inventory: On August 28, LME zinc inventory increased by 75 mt to 97,950 mt, up 0.08%. According to SMM communication, as of last Thursday (August 27), total zinc ingot inventory across SMM's seven regions was 269,900 mt, down 500 mt from August 20 and up 1,600 mt from August 24, with domestic inventory increasing.

Zinc Price Forecast: Last Friday, LME zinc recorded a small bearish candlestick with a long upper shadow. The Fed Chairman released hawkish signals at the Jackson Hole meeting. Market expectations for a September rate hike heated up. The US dollar and US Treasury yields strengthened, weighing on base metals. LME zinc shot up to highs and then pulled back quickly. Last Friday, SHFE zinc recorded a bullish candlestick. LME zinc's retreat after rapid rise dragged SHFE zinc lower; subsequently, LME stabilized at low levels, and SHFE zinc followed suit to recover. Although domestic consumption showed mediocre performance, SHFE zinc is currently heavily affected by changes in LME and is expected to continue to consolidate at highs during the day.
Data Source Statement: Except for public information, all other data are processed by SMM based on public information and market communication, relying on SMM's internal database models, and are for reference only, not constituting decision-making advice.