US Dollar Index Remains High, LME Zinc Center Declines [SMM Zinc Morning Meeting Summary]

Zinc Morning Meeting Summary on January 6

 Spot Market Fundamentals

Shanghai: In the early session, market quotations were at premiums of 180–240 yuan/mt over the average price, with almost no follow-up quotes. In the second trading session, general domestic brands were quoted at premiums of 500–560 yuan/mt against the SHFE 2501 contract, Huize at a premium of 540 yuan/mt, and high-end brand Shuangyan at a premium of 600 yuan/mt against the SHFE 2501 contract. Few traders were active in the Shanghai market, and with limited supply, spot premiums continued to rise, with spot trades mainly occurring between traders.

Guangdong: Initially, suppliers quoted premiums of 545–585 yuan/mt for brands such as Qilin, Mengzi, and Danxia. Zinc prices fell today, prompting increased downstream buying the dip and restocking enthusiasm, leading to a warmer market. In the second session, Qilin and Danxia were quoted at premiums of 575–585 yuan/mt over the online price. Overall, influenced by falling zinc prices, downstream enterprises restocked more actively, improving market transactions. Meanwhile, the price spread between futures contracts slightly expanded, and premiums edged up.

Tianjin: By midday close, Xinzi and Chihong were quoted at premiums of 300–350 yuan/mt against the 01 contract, Xikeng had no quotes, Bailing was quoted at around 340 yuan/mt, and high-end brand Zijin was quoted at premiums of 370–400 yuan/mt against the 01 contract. With futures pulling back significantly, downstream buyers maintained a bearish outlook and focused on restocking for immediate needs. Traders held firm on their offers, and overall market transactions were moderate.

Ningbo: In the first session, Yongchang was quoted at a premium of 460 yuan/mt against the SHFE 2501 contract, and Honglu-V at a premium of 520 yuan/mt. In the second session, traders maintained quotes at the same level as the previous session. The Ningbo spot market saw no significant improvement in supply. With a notable decline in futures prices, traders slightly raised spot premiums, while downstream buyers made purchases based on immediate needs. Attention is on zinc ingot arrivals next week.

Zinc Price Outlook: Last Friday, LME zinc recorded a bearish candlestick, with the KDJ indicator widening. Although the US dollar index slightly declined on Friday, it remained at a high level, continuing to pressure base metal prices, and LME zinc's center continued to fall. On the same day, SHFE zinc recorded a bullish candlestick, with the lower Bollinger Band acting as resistance. Domestic zinc concentrate TCs rose significantly MoM in January, alleviating the tightness in zinc ore supply and weakening support for zinc prices. Coupled with downstream sectors gradually entering holiday mode and weakening demand, SHFE zinc continued to fluctuate downward.