The annual CPI rate fell to a six-month low, and LME zinc recorded a bullish candlestick. [SMM Morning Meeting Summary]

Futures market: Overnight, LME zinc opened at $2,624/mt, initially rose slightly to a high of $2,690/mt, then fluctuated considerably along the daily average line as bulls and bears battled. During European trading hours, longs reduced positions, pushing LME zinc down to a low of $2,606/mt. Subsequently, LME zinc rebounded slightly, recovering some losses and fluctuating rangebound along the daily average line, finally closing up at $2,628.5/mt, up $8.5/mt or 0.32%. Trading volume decreased to 107,000 lots, and open interest fell by 4,091 lots to 214,000 lots. Overnight, the most-traded SHFE zinc 2505 contract opened at 22,575 yuan/mt, initially fell to a low of 22,430 yuan/mt as longs reduced positions, then rose to a high of 22,730 yuan/mt as shorts reduced positions. However, longs reducing positions caused SHFE zinc to pull back slightly, finally closing down at 22,580 yuan/mt, down 125 yuan/mt or 0.55%. Trading volume decreased to 71,416 lots, and open interest fell by 2,698 lots to 66,453 lots.

Macro: Gold continued to hit new historical highs; Trump: The first agreement on tariffs is very close; US media: The hawkish camp, including the Commerce Secretary and trade advisor, has been marginalized, with the Treasury Secretary taking charge of trade; The US March unadjusted CPI YoY hit a six-month low, with the market almost fully pricing in a US Fed rate cut in June; Trump: A meeting with Putin is not ruled out in the future; Iran is considering a temporary nuclear agreement with the US; The US House of Representatives passed a budget framework, clearing the way for Trump's tax cuts and debt ceiling increase; China's March CPI fell 0.1% YoY; The Ministry of Commerce responded to whether China is negotiating with the US: Talks are welcome, and we are ready to fight if necessary; Commercial banks are accelerating the implementation of repurchase and share buyback loans.

Spot market:

Shanghai: In the morning session, market quotations were at premiums of 90~130 yuan/mt against the average price, with few quotations against the futures. In the second trading session, ordinary domestic brands were quoted at premiums of 380~400 yuan/mt against the 2505 contract, Honglu-v at 370 yuan/mt, Huize at 380 yuan/mt, and the high-priced brand Shuangyan at 300-350 yuan/mt. The near-month price spread continued to expand, with some suppliers taking advantage to further raise spot premiums. However, futures rebounded significantly, and downstream purchasing sentiment was cautious, with little stockpiling sentiment for zinc ingots. Market trading atmosphere was sluggish yesterday.

Guangdong: Spot discounts of 170 yuan/mt against Shanghai, with the Shanghai-Guangdong price spread widening. In the first session, suppliers quoted Qilin and Lanzinc at premiums of 160~190 yuan/mt. In the second session, Qilin was quoted at a premium of 190 yuan/mt against the net price. Overall, futures rose yesterday, with the current month spread gradually widening and the backwardation structure expanding. As delivery approaches, the number of market traders has decreased. Spot premiums and discounts have risen, and with downstream inventory previously stocked up, purchasing sentiment is low at high prices. Market trading was subdued yesterday.

Tianjin: Tianjin was quoted at a premium of around 10 yuan/mt against Shanghai. By the midday close, Xinzhi was quoted at premiums of 500~520 yuan/mt against the 05 contract, Xikuang delivered at around 300 yuan/mt, and the high-priced brand Zijin at premiums of 510~550 yuan/mt. Zinc prices rebounded yesterday, with downstream buyers cautious at high prices. Overall purchasing sentiment was moderate, with Tianjin zinc ingots continuing to destock. Traders stood firm on quotes, further raising premiums, but overall trading was poor.

Ningbo: Spot premiums of 60 yuan/mt against Shanghai, with mainstream quotations in Ningbo against the 2505 contract. In the first session, Yongchang was quoted at a premium of 400 yuan/mt, Honglu-v at 390 yuan/mt. In the second session, trader quotations were flat compared to the previous session. Few traders in Ningbo were selling, with spot premiums continuing to rise. However, futures rose significantly, and downstream sentiment turned cautious again. Purchasing was as needed yesterday, with overall spot trading performance moderate.

Social inventory: On April 10, LME zinc inventory fell by 1,350 mt to 1.218 million mt, down 1.10%. According to SMM communication, as of Thursday, April 10, SMM's seven-region zinc ingot inventory totaled 102,100 mt, down 7,000 mt from April 3 and 8,900 mt from April 7, with domestic inventory recording a decrease.

Zinc price forecast: Overnight, LME zinc recorded a long upper shadow bullish candlestick, with the 10/60-day moving averages providing resistance above and the lower Bollinger Band providing support below. Overnight, SHFE zinc recorded a bullish candlestick, with various moving averages providing resistance above. The US March unadjusted CPI YoY hit a six-month low, increasing market concerns, but continuously declining overseas inventory provided some support for SHFE zinc, with LME zinc maintaining a fluctuating trend. Overnight, SHFE zinc recorded a bullish candlestick, with the 10/60-day moving averages providing resistance above and the 5-day moving average providing support below. China's March CPI fell 0.1% YoY, and the reduction in domestic social inventory also provided some support for zinc prices, with SHFE zinc maintaining a fluctuating trend.