Tariff Disturbances Persist, LME Zinc Records a Barefoot Yang Pillar [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc opened at $2,939.5/mt, hitting a low at the opening, and fluctuated upward to a high of $2,976/mt in early trading. During European trading hours, shorts reduced positions, causing SHFE zinc to fluctuate downward. However, LME zinc quickly rebounded at the end of the session, recovering some losses, and finally closed up at $2,968.5/mt, up $30/mt, or 1.02%. Trading volume increased to 79,506 lots, and open interest rose by 2,093 lots to 226,000 lots. Overnight, the most-traded SHFE zinc 2505 contract opened at 24,155 yuan/mt, immediately hitting a low of 24,080 yuan/mt. Longs then increased positions, causing SHFE zinc to fluctuate upward. During the tug-of-war between longs and shorts, SHFE zinc attempted to break below the daily moving average, but longs prevailed, allowing SHFE zinc to recover its losses. Subsequently, longs took profits and exited, causing SHFE zinc to pull back slightly. At the end of the session, longs increased positions again, pushing SHFE zinc higher to a peak of 24,220 yuan/mt, and it finally closed up at 24,205 yuan/mt, up 80 yuan/mt, or 0.33%. Trading volume decreased to 67,961 lots, and open interest increased by 96 lots to 131,000 lots.

Macro: US Fed Governor Kugler: Current Fed policy remains restrictive; Trump is considering a "two-step" strategy for his new tariff policy; Vance may visit Greenland on Friday; The US and Russia-Ukraine agree to ensure navigation safety in the Black Sea; White House: The US and Ukraine agree to ensure safe navigation in the Black Sea, and the US commits to facilitating prisoner exchanges; Ministry of Commerce: Will work with relevant departments to introduce targeted measures for tax refunds upon departure and increase the number of tax refund stores.

Spot market:

Shanghai: In the morning session, market quotations were at premiums of 0~20 yuan/mt against the average price, with fewer quotations against the futures. In the second trading session, ordinary domestic brands were quoted at discounts of 10~0 yuan/mt against the 2504 contract, Baiyin was quoted at parity against the 2504 contract, and the premium brand Shuangyan was quoted at premiums of 40-60 yuan/mt against the 2504 contract. The futures market continued to fluctuate at highs in the morning. Yesterday was the last day for March long-term contracts, and market traders sold off more, but downstream buyers had some inventory from previous purchases, resulting in low purchase willingness yesterday. Overall premiums remained low, and spot transactions for some traders turned worse MoM.

Guangdong: Spot premiums against Shanghai were 20 yuan/mt, and the Shanghai-Guangdong price spread widened. In the first session, suppliers quoted Kirin, Mengzi, Feilong, and Lanzinc at discounts of 20~premiums of 5 yuan/mt. In the second session, Kirin, Mengzi, Huize, and Lanzinc were quoted at discounts of 20~premiums of 5 yuan/mt against the net price. Overall, zinc prices fluctuated at highs yesterday, with weak downstream purchasing demand. Downstream companies had ample inventory from previous low-price purchases, resulting in sluggish market transactions. Although some traders had a strong sentiment to stand firm on quotes, actual transactions were difficult under high premiums. Spot premiums and discounts in Guangdong remained unchanged from the previous day.

Tianjin: Tianjin was quoted at parity against Shanghai. By the midday close, Xizi was quoted at premiums of 50~60 yuan/mt against the 04 contract, factory-delivered Xikuang Jinli was quoted at discounts of 0~20 yuan/mt against the 04 contract, Bailing delivered was quoted at 60 yuan/mt against the 05 contract, and the premium brand Zijin was quoted at premiums of 80~100 yuan/mt against the 04 contract. Zinc prices mainly fluctuated yesterday, with downstream buyers remaining cautious. A small portion of buyers restocked for immediate needs, while traders' self pick-up prices from warehouses were firm and slightly higher. Factory-delivered zinc ingot quotations remained stable, and the price spread between warehouse self pick-up and factory-delivered zinc ingots remained wide. Overall transactions were poor.

Ningbo: Spot premiums against Shanghai were 40 yuan/mt, and mainstream quotations in Ningbo were against the 2504 contract. In the first session, Kirin was quoted at delivered premiums of 90 yuan/mt against the 2504 contract, Honglu-v was quoted at premiums of 20 yuan/mt against the 2504 contract, Hazinc was quoted at discounts of 40 yuan/mt against the 2504 contract, and Huize was quoted at premiums of 80 yuan/mt against the 2504 contract. In the second session, traders' quotations were unchanged from the previous session. Kirin zinc ingots arrived at Ningbo port, supplementing spot market supply. Combined with the futures market continuing to fluctuate at highs, downstream buyers purchased as needed. Spot transactions were average yesterday, with overall premiums slightly down MoM.

Social inventory: On March 25, LME zinc inventory decreased by 3,425 mt to 150,225 mt, down 2.33%. According to SMM communication, as of March 24, SMM's seven-region zinc ingot inventory totaled 128,900 mt, down 9,900 mt from March 17 and 2,100 mt from March 20, recording a domestic inventory decline.

Zinc price forecast: Overnight, LME zinc recorded a bullish candlestick, with the upper Bollinger Band acting as resistance and the 5-day moving average providing support. Uncertainty over Trump's tariff policy has made the market cautious about future developments. The US dollar index pulled back, and overseas inventories continued to decline, allowing LME zinc to rise slightly. Overnight, SHFE zinc recorded a bullish candlestick, with the upper Bollinger Band acting as resistance and various moving averages providing support. Domestic mine TC has been rising recently, and downstream consumption during the peak season is not significant. However, domestic positive expectations remain, and zinc prices are expected to fluctuate considerably in the short term.