The suspension of equivalent tariffs! LME zinc center rises [SMM Morning Meeting Summary]

Futures market: Overnight, LME zinc opened at $2,550/mt, then fluctuated along the daily average line, hitting a low of $2,515/mt. During the night session, LME zinc fluctuated upward, reaching a high of $2,620/mt at the end of the session, and finally closed up at $2,620/mt, up $67/mt, a gain of 2.62%. Trading volume decreased to 132,000 lots, and open interest decreased by 269 lots to 218,000 lots. Overnight, the most-traded SHFE zinc 2505 contract opened at 21,830 yuan/mt. At the beginning of the session, SHFE zinc briefly hit a low of 21,780 yuan/mt, then quickly rose above the daily average line as longs increased positions, reaching a high of 22,335 yuan/mt. Subsequently, in a tug-of-war between longs and shorts, SHFE zinc fluctuated around 22,210 yuan/mt, and finally closed up at 22,230 yuan/mt, up 300 yuan/mt, a gain of 1.37%. Trading volume decreased to 106,000 lots, and open interest decreased by 162 lots to 75,087 lots.

Macro: After 13 hours of taking effect, Trump announced the suspension of reciprocal tariff policies on most economies; the White House: a 10% global tariff will still be levied during negotiations; Trump: Stay calm! Everything will be resolved smoothly, now is a great time to buy; the EU voted to impose a 25% tariff on $21 billion worth of US goods; US Fed March meeting minutes: Fed policymakers generally believe the economy faces risks of rising inflation and slowing growth; Cleveland Fed President Mester: Ready to intervene in the money market if needed; China resolutely counterattacks with a "stimulus policy package": imposes an 84% tariff on the US; Premier Li Qiang: New incremental policies will be introduced in a timely manner according to the situation.

Spot market:

Shanghai: In the morning session, the market quoted premiums of 120~130 yuan/mt against the average price, with fewer quotes against the futures. In the second trading session, ordinary domestic brands quoted premiums of 200~250 yuan/mt against the 2505 contract, Honglu-v quoted a premium of 200 yuan/mt against the 2505 contract, Huize quoted a premium of 250 yuan/mt against the 2505 contract, and the high-priced brand Shuangyan quoted premiums of 250-300 yuan/mt against the 2505 contract. The near-month backwardation structure continued to widen to over 200 yuan/mt, and Shanghai market volumes still showed no improvement. As futures continued to decline, Shanghai spot premiums rose further yesterday, but downstream buyers had some inventory from previous purchases, resulting in a strong wait-and-see sentiment, and spot trading performance was average.

Guangdong: Spot discounts of 100 yuan/mt against Shanghai, with the Shanghai-Guangdong price spread widening. In the first session, suppliers quoted premiums of 145~165 yuan/mt for Qilin, Mengzi, Feilong, and Lanzinc. In the second session, Mengzi and Lanzinc quoted premiums of 145~155 yuan/mt against the net price. Overall, the zinc price center continued to decline yesterday, with traders raising premiums to sell. Some downstream buyers had high inventory from previous purchases, resulting in low buying sentiment, but some downstream buyers were willing to restock at low prices, driving spot premiums and discounts higher.

Tianjin: Tianjin quoted premiums of around 10 yuan/mt against Shanghai. By the midday close, Xizi quoted premiums of 500~520 yuan/mt against the 05 contract, Xikuang delivery quoted around 300 yuan/mt against the 05 contract, and the high-priced brand Zijin quoted premiums of 500~520 yuan/mt against the 05 contract. Yesterday, the zinc price continued to be under downward pressure, with some downstream buyers purchasing at low prices. Downstream inventory was high, resulting in average purchasing sentiment. Market spot volumes were low, mostly pre-sold, with fewer trader quotes and rising premiums, resulting in average overall trading.

Ningbo: Spot premiums of 50 yuan/mt against Shanghai, with mainstream quotes in Ningbo against the 2505 contract. In the first session, Yongchang quoted a premium of 280 yuan/mt against the 2505 contract, Honglu-v quoted a premium of 270 yuan/mt against the 2505 contract, and Huize quoted a premium of 310 yuan/mt against the 2505 contract. In the second session, Honglu-v raised its premium to 300 yuan/mt against the 2505 contract, while other traders' quotes remained unchanged from the previous session. Yesterday, some downstream buyers continued to digest previous inventory, resulting in average buying sentiment. Spot trading was mainly for restocking based on rigid demand, but as futures continued to decline, Ningbo spot premiums rose MoM.

Social inventory: On April 9, LME zinc inventory decreased by 2,675 mt to 123,150 mt, a drop of 2.13%. According to SMM communication, as of Monday, April 7, SMM's seven-region zinc ingot inventory totaled 111,000 mt, down 14,900 mt from March 31 and up 1,900 mt from April 3, with domestic inventory recording an increase.

Zinc price forecast: Overnight, LME zinc recorded a bullish candlestick, with various moving averages forming resistance above. After 13 hours of taking effect, Trump announced the suspension of reciprocal tariff policies on most economies. The easing of tariff policies gave the market some breathing room, while overseas inventory decreased and LME zinc rose slightly. Overnight, SHFE zinc recorded a bullish candlestick, with various moving averages forming resistance above. After China announced an increase in tariffs to 84%, Trump said he would immediately raise tariffs on Chinese goods to 125% and announced the suspension of targeted tariffs on most countries. Driven by LME, SHFE zinc rose slightly, but under the pressure of fluctuating tariffs, SHFE zinc is expected to remain in the doldrums.