The US dollar rebounded slightly, and the LME zinc recorded a small bearish candlestick [SMM Morning Meeting Minutes].

Futures: Overnight, LME zinc opened at $2,631.5/mt. Initially, it fluctuated along the daily average line. During European trading hours, shorts exited, pushing the center of LME zinc higher to touch $2,658/mt. Subsequently, longs took profits and exited, causing LME zinc to decline in a stepwise manner. By the end of the session, the center had shifted down to around $2,615/mt, closing at $2,614/mt, down $23/mt, a drop of 0.87%. Trading volume decreased to 7,991 lots, while open interest increased by 910 lots to 215,000 lots. Overnight, the most-traded SHFE zinc 2506 contract opened at 22,320 yuan/mt. Initially, a tug-of-war between longs and shorts saw longs briefly push the price up to 22,400 yuan/mt. However, shorts increased their positions, pressuring SHFE zinc to drop to a low of 22,260 yuan/mt. It eventually closed at 22,285 yuan/mt, down 70 yuan/mt, a decline of 0.31%. Trading volume decreased to 67,098 lots, while open interest increased by 1,954 lots to 116,000 lots.

Macro: The White House stated that the ball is in China's court regarding trade talks, with Trump remaining open to reaching a deal. Tariff uncertainties led to a slight decline in U.S. stocks. China's Q1 GDP is expected to grow 5.1% YoY, achieving a "strong start," but tariff challenges have emerged. The China-Vietnam joint statement emphasized joint opposition to hegemony and power politics, aiming to better manage and actively resolve maritime disputes.

Spot market:

Shanghai: In the morning session, market quotations were at premiums of 20~40 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 240~260 yuan/mt against the 2505 contract, Honglu-v at 260 yuan/mt, Baiyin at 270 yuan/mt, Huize at 250~300 yuan/mt, and the premium brand Shuangyan at 300 yuan/mt. As the delivery date approaches, the near-month price spread remains high. Downstream companies are purchasing as needed, with spot transactions showing no improvement yesterday. Some traders expect spot premiums to decline, and Shanghai spot premiums did drop slightly yesterday.

Guangdong: Spot premiums against Shanghai were at 10 yuan/mt, with the Shanghai-Guangdong price spread narrowing. In the first session, suppliers quoted premiums of 220~270 yuan/mt for Qilin, Mengzi, and Lanzinc. In the second session, premiums for Qilin, Mengzi, and Lanzinc against the net price were 240~270 yuan/mt. Overall, zinc prices maintain a fluctuating trend, with downstream companies mainly making just-in-time procurement. However, some traders are quoting higher premiums and discounts, leading to reduced market transactions under high premiums. As the contract rollover progresses, Guangdong spot premiums and discounts are expected to gradually pull back.

Tianjin: Tianjin spot premiums against Shanghai were around 80 yuan/mt. By the midday close, Xizi was quoted at around 480 yuan/mt against the 05 contract, Xikuang delivered at 240~260 yuan/mt, Chihong 1# delivered at around 200 yuan/mt against the 2505 contract, and the premium brand Zijin at around 500 yuan/mt against the 05 contract. Yesterday, zinc prices dropped slightly, with downstream companies cautious about high prices and mainly restocking as needed. Some zinc ingots arrived in Tianjin, but overall spot circulation remains tight, keeping premiums high. Overall transactions were moderate.

Ningbo: Spot premiums against Shanghai were at 30 yuan/mt, with mainstream quotations in Ningbo against the 2505 contract. In the first session, Yongchang was quoted at premiums of 250~280 yuan/mt, Qilin at 250~280 yuan/mt, Baiyin at 250 yuan/mt, and Honglu-v at 280 yuan/mt. In the second session, trader quotations remained unchanged from the previous session. Long-term contract zinc ingots arrived in Ningbo, with many traders delivering goods yesterday. Some low-priced factory-delivered zinc ingots impacted domestic warehouse transactions. Ningbo spot premiums declined slightly yesterday, with downstream companies making just-in-time procurement. Overall spot transactions showed no improvement.

Social inventory: On April 15, LME zinc inventory decreased by 5,275 mt to 112,025 mt, a drop of 4.5%. According to SMM, as of April 14, SMM's seven-region zinc ingot inventory totaled 105,600 mt, down 5,400 mt from April 7 but up 3,500 mt from April 10, indicating an increase in domestic inventory.

Zinc price outlook: Overnight, LME zinc recorded a small bearish candlestick, with the daily candlestick center shifting downward. The 5-day moving average has turned into a resistance level. The US dollar rebounded slightly, and non-ferrous metals generally declined. Combined with tariff uncertainties and downward revisions to economic growth expectations, zinc prices face upward pressure. Overnight, SHFE zinc recorded a small bearish candlestick, with the lower Bollinger Band providing support. Dragged by the LME, SHFE zinc showed weak performance. Expectations of rising TCs and high sulfuric acid profits have boosted smelter production enthusiasm. Attention should be paid to consumption matching, with short-term fluctuations likely to remain in the doldrums.