Zinc Prices Maintain Sideways Movement, Focus on Macro Sentiment Changes [SMM Morning Meeting Minutes]

April 15 Zinc Morning Meeting Minutes Futures market: Overnight, LME zinc opened at $2,670/mt, initially consolidating around the daily average line before bears increased positions, causing a brief decline before returning to the daily average line. During European trading hours, it touched a high of $2,681/mt, but as bears increased positions, the center of gravity shifted downward, accelerating the decline during the night session to a low of $2,616/mt. It saw a slight correction at the end of the session, closing down at $2,637/mt, a drop of $24/mt or 0.9%. Trading volume decreased to 8,584 lots, while open interest increased by 837 lots to 216,000 lots. Overnight, the most-traded SHFE zinc 2506 contract opened at 22,415 yuan/mt. Initially, bears increased positions, pushing the price down rapidly to a low of 22,250 yuan/mt. Subsequently, bulls entered at lower levels, leading to a "V" reversal, with the center of gravity consolidating around 22,380 yuan/mt. It closed down at 22,410 yuan/mt, a drop of 60 yuan/mt or 0.27%. Trading volume decreased to 79,476 lots, while open interest increased by 4,869 lots to 111,000 lots.

Macro: Trump: Considering measures to assist automakers, recently helped Apple CEO Tim Cook; US Treasury Secretary Besant: No evidence that sovereign investors are selling US assets, will interview Powell's successor in the fall; New York Fed's 1-year inflation expectations rose to 3.58%; Fed Governor Waller: In a scenario with smaller tariffs, an interest rate cut may occur in H2; OPEC lowered global crude oil demand growth forecasts for this year and next, as well as global and US economic growth forecasts; The US has made "initial contact" with China on tariffs through intermediaries; China and Vietnam signed 45 bilateral cooperation documents; General Administration of Customs: "The sky won't fall," China's domestic demand market is vast and serves as an important rear base; Guangzhou further clarified subsidy directions and increased subsidy efforts to boost consumption of automobiles, home appliances, and digital products.

Spot market:

Shanghai: In the morning session, market quotations were at premiums of 40~60 yuan/mt against the average price, with fewer quotations against the futures market. In the second trading session, ordinary domestic brands were quoted at premiums of 280~300 yuan/mt against the 2505 contract, Honglu-v at 270 yuan/mt, Baiyin at 280 yuan/mt, Huize at 260~300 yuan/mt, and the premium brand Shuangyan at 260~300 yuan/mt. The futures market maintained a fluctuating trend in the morning, with the near-month price spread narrowing as the delivery date approached. Spot premiums declined MoM, while downstream enterprises remained cautious, with spot inquiries and transactions performing moderately.

Guangdong: Spot discounts against Shanghai were at 20 yuan/mt, with the Shanghai-Guangdong price spread narrowing. In the first session, suppliers quoted premiums of 240~300 yuan/mt for Qilin, Mengzi Huize, and Lanzinc. In the second session, Qilin, Mengzi, and Lanzinc were quoted at premiums of 240~260 yuan/mt against the net price. Overall, the futures market maintained a fluctuating trend yesterday, with downstream enterprises holding significant inventory from previous low prices, leading to subdued market activity. The current price spread between contracts is large, with some brands in Guangdong quoting relatively high premiums and discounts. As the contract rollover approaches, spot premiums in Guangdong are expected to fluctuate at highs in the short term.

Tianjin: Tianjin quoted premiums of around 60 yuan/mt against Shanghai. By the midday close, Xizi was quoted at 480~500 against the 05 contract, Xikuang delivery at around 260 yuan/mt, and the premium brand Zijin at around 500 yuan/mt against the 05 contract. Zinc prices fluctuated yesterday, with downstream enterprises cautious about high prices and holding significant inventory. With limited spot supply, traders maintained firm quotes, and overall transactions were moderate.

Ningbo: Spot premiums against Shanghai were at 60 yuan/mt, with mainstream quotations in Ningbo against the 2505 contract. In the first session, Yongchang was quoted at premiums of 280~320 yuan/mt, Qilin at 300 yuan/mt, and Honglu-v at 290 yuan/mt against the 2505 contract. In the second session, trader quotations remained unchanged from the previous session. Few traders in Ningbo were selling yesterday, but Qilin zinc ingots were delivered to Ningbo warehouses over the weekend, supplementing spot supply. Combined with downstream enterprises purchasing as needed, spot premiums in Ningbo also declined yesterday.

Social inventory: On April 14, LME zinc inventory decreased by 2,050 mt to 117,300 mt, a drop of 1.72%. According to SMM, as of April 14, the total zinc ingot inventory across seven regions in China was 105,600 mt, down 5,400 mt from April 7 but up 3,500 mt from April 10, recording an increase in domestic inventory.

Zinc price forecast: Overnight, LME zinc stopped rising and started to fall, with the 10-day moving average forming resistance. The US tariff policy remains uncertain, and with the domestic import window intermittently opening, domestic supply pressure is increasing, keeping zinc prices under pressure. Overnight, SHFE zinc recorded a small bearish candle, with the 5-day moving average forming resistance. Social inventory increased again this week, and with the CZSPT group's Q2 TC price plan of $70~90/dmt, TCs still have room to rise, hindering zinc price gains.