The market is concerned about the tariff outlook, and LME zinc is trending downward. [SMM Morning Meeting Summary]

Futures market: Overnight, LME zinc opened at $2,851.5/mt. At the beginning of the session, shorts exited, pushing the center of LME zinc higher to touch $2,875/mt. During the European trading session, shorts increased their positions, causing LME zinc to plunge and hit a low of $2,808/mt in the night session. Subsequently, the center of LME zinc moved higher, eventually closing down at $2,816.5/mt, a drop of $37/mt or 1.03%. Trading volume increased to 13,028 lots, and open interest rose by 767 lots to 223,000 lots. Overnight, the most-traded SHFE zinc 2505 contract opened at 23,480 yuan/mt. At the start of the session, shorts increased their positions, causing SHFE zinc to plunge and hit a low of 23,230 yuan/mt. Subsequently, the center of SHFE zinc moved higher, fluctuating around 23,300 yuan/mt, and eventually closed up at 23,305 yuan/mt, a drop of 310 yuan/mt or 1.31%. Trading volume decreased to 98,893 lots, and open interest increased by 6,535 lots to 115,000 lots.

Macro: US Fed's Barkin: The bond market reflects more economic recession risks; US Treasury Secretary Besant: The tariffs announced on Wednesday will be the ceiling; The Washington Post: The White House plans to impose tariffs of about 20% on at least most goods imported into the US; Sources: OPEC+ will stick to its production increase plan at Thursday's meeting; Wang Yi meets with Russian President Putin; A national teleconference on promoting the trade-in policy for consumer goods was held in Beijing; Bank of China: The minimum purchase amount for gold accumulation products has been adjusted from 700 yuan to 750 yuan.

Spot market:

Shanghai: In the morning session, the market quoted premiums of 10~20 yuan/mt against the average price, with fewer quotes against the futures. In the second trading session, ordinary domestic brands quoted premiums of 30~50 yuan/mt against the 2505 contract, Baiyin quoted a premium of 30 yuan/mt against the 2504 contract, Huize quoted a premium of 100 yuan/mt against the 2505 contract, and the high-priced brand Shuangyan quoted premiums of 70~100 yuan/mt against the 2505 contract. Yesterday morning, the futures market rebounded slightly, with downstream buyers having made more spot purchases the previous day. Yesterday, there were fewer inquiries for spot purchases, and spot transactions were weaker MoM. Overall premiums were basically flat compared to the previous day. Some traders made more spot sales the previous day and focused on spot purchases yesterday. Overall trading was mainly among traders.

Guangdong: Spot discounts of 30 yuan/mt against Shanghai were maintained, and the Shanghai-Guangdong price spread remained unchanged. In the first session, suppliers quoted premiums of 0~35 yuan/mt for Qilin, Mengzi, Huize, Feilong, and Lanzinc. In the second session, Qilin and Lanzinc quoted premiums of 5~25 yuan/mt against the net price. Overall, in the first session, the futures market maintained a fluctuating trend, and downstream buyers had a high acceptance of the current price, with a strong market atmosphere. In the second session, the futures market rose slightly, and fewer traders were selling. Yesterday, the market performed moderately, and spot premiums/discounts were flat compared to the previous day.

Tianjin: Tianjin quoted discounts of around 10 yuan/mt against Shanghai, and yesterday, Tianjin quoted for the contract rollover. As of the midday close, Xizi quoted premiums of 80~100 yuan/mt against the 05 contract, factory-delivered Xikuang quoted discounts of 0~20 yuan/mt against the 05 contract, and the high-priced brand Zijin quoted premiums of 100~150 yuan/mt against the 05 contract. Yesterday, zinc prices fluctuated downward, and downstream buyers had made more purchases the previous day. Yesterday, purchasing enthusiasm decreased, and sales were good in the previous two days. Tianjin inventory declined, and traders raised their quotes. Trading was mainly among traders, and overall transactions were weaker than the previous day.

Ningbo: Spot premiums of 50 yuan/mt against Shanghai were quoted, and the mainstream in Ningbo quoted against the 2504 contract. In the first session, Yongchang quoted a premium of 60 yuan/mt against the 2504 contract, Qilin quoted a premium of 60 yuan/mt against the 2504 contract, Honglu-v quoted a premium of 60 yuan/mt against the 2504 contract, and Huize quoted a premium of 100 yuan/mt against the 2505 contract. In the second session, traders' quotes were flat compared to the previous session. Yesterday, spot transactions were good, and traders made large sales. Yesterday, there was less market supply, and traders quoted passively. Spot premiums remained high. Some downstream buyers had already stocked up at low prices the previous day, while other companies maintained purchasing as needed. Yesterday, spot transactions were weaker MoM.

Social inventory: On April 1, LME zinc inventory decreased by 1,700 mt to 136,500 mt, a drop of 1.23%. According to SMM communication, as of Monday, March 31, SMM's seven-region zinc ingot inventory totaled 125,900 mt, down 3,000 mt from March 24 and down 4,100 mt from March 27. Domestic inventory recorded a decrease.

Zinc price forecast: Overnight, LME zinc recorded a large bearish candlestick, with the middle Bollinger Band forming resistance. Market concerns about the economic damage caused by reciprocal tariffs intensified, and non-ferrous metals were generally dragged down. The center of LME zinc moved lower. Overnight, SHFE zinc recorded a large bearish candlestick, with the KDJ line opening downward. Fundamentally, zinc ingot supply is expected to remain relatively loose, while consumption growth is limited. The market is still watching the impact of reciprocal tariffs. SHFE zinc declined, and it is expected that SHFE zinc will continue to fluctuate in the short term.