Domestic social inventory continue to accumulate, SHFE zinc is weak [SMM zinc morning comment]

Published: Feb 6, 2024 09:50

Save

LME zinc opened at $2465/mt yesterday evening, and hit a high of $2465.5/mt before falling back to $2416/mt, and closed at $2425/mt, a decrease of $26.5/mt or 1.08%. Trading volume decreased to 9888 lots, and open interest grew 2021 lots to 224,000 lots. LME zinc inventory decreased by 1050 mt or 0.53% to 197275 mt. The owner of Russia's Ozernoye zinc mine said that the mine has postponed the start-up of zinc concentrate until at least the third quarter of this year. The delay in production has intensified the market's expectations for long-term shortages at the mine end. However, the U.S. ISM service industry index rose to 53.4 in January. , hitting a four-month high, strong economic data continues to dampen market expectations for interest rate cuts by the Federal Reserve, and macro bearish sentiment has revived. Grupo Mexico's fourth quarter report for 2023 revealed that its Buenavista zinc project will begin operations in the first quarter of 2024.

The most active SHFE 2403 zinc contract opened at 20520 yuan/mt and fell 15 yuan/mt or 0.07% to close at 20520 yuan/mt trading with the high-end of 20585 yuan/mt and the low-end of 20485 yuan/mt. Trading volumes decreased to 26821 lots and open interest grew 706 lots to 80131 lots. Inventories in seven SMM markets in China recorded 89,900 tons, an increase of 7,500 tons from the previous week. Domestic social warehouses continued to accumulate, and the support for zinc prices from inventories weakened. Shanghai zinc was weak and fluctuated.

Market review

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

16 mins ago

SHFE Zinc Moved Lower Driven by LME, Focus on Macro Marginal Changes [SMM Zinc Morning Comment]

[SMM Zinc Morning Comment] Overnight, the most-traded SHFE zinc 2605 contract opened at 23,785 yuan/mt. At the beginning of the session, bears reduced their positions and SHFE zinc edged up, touching the intraday high of 23,905 yuan/mt. Subsequently, bulls reduced their positions, causing prices to fluctuate and pull back. During the session, prices continued to decline, dipping to 23,710 yuan/mt. Towards the end of the session, prices stabilized slightly and rebounded, ultimately closing lower at 23,740 yuan/mt, down 75 yuan/mt or 0.31%.

16 mins ago

23 mins ago

Strait of Hormuz Closed Again, LME Zinc Under Pressure [SMM Morning Meeting Minutes]

[SMM Morning Meeting Minutes: Strait of Hormuz Closed Again, LME Zinc Under Pressure] Overnight, the LME zinc contract recorded a long upper shadow bearish candlestick, with various moving averages below providing support. On the macro front, optimistic sentiment over the US-Iran ceasefire drove risk assets higher, and the US dollar index touched a one-month low. However, the escalation of the Israel-Lebanon conflict, the resumption of hostile actions between Iran and Israel, Iranian media reporting that the Strait of Hormuz had been fully closed, combined with the possibility of a US Fed rate hike, put LME zinc under pressure.

23 mins ago

15 hours ago

Why Did Zinc Concentrate TCs Decline in April During the Regular Mine Production Resumption Season?

As of April 3, the average domestic zinc concentrate TC dropped to 1,350 yuan/mt in metal content, and the imported zinc concentrate TC fell to -$14.5/dmt, with the import market once again entering negative territory. After Chinese New Year, domestic mines gradually resumed production — so why did zinc concentrate TCs decline again in April?

15 hours ago