Antamina Mine Suspends Operations, LME Zinc Rebounds from Lows [SMM Zinc Morning Meeting Summary]

Zinc Morning Meeting Minutes for April 24

Futures market: Overnight, LME zinc opened at $2,606/mt, initially SHFE zinc tested a low of $2,606/mt, and after opening, SHFE zinc fluctuated around the daily average line, rising during the night session to a high of $2,677.5/mt before LME zinc fell back to near the daily average line, finally closing up at $2,635.5/mt, up $34.5/mt, a gain of 1.33%, with trading volume increasing to 13,891 lots and open interest rising by 627 lots to 202,000 lots. Overnight, the most-traded SHFE zinc 2506 contract opened at 22,550 yuan/mt, initially SHFE zinc slightly pulled up to a high of 22,640 yuan/mt, then fell back from highs to fluctuate below the daily average line, testing a low of 22,450 yuan/mt, finally closing up at 22,465 yuan/mt, up 5 yuan/mt, a gain of 0.02%, with trading volume decreasing to 99,828 lots and open interest rising by 478 lots to 128,000 lots.

Macro: UK media: Trump plans to exempt car manufacturers from some tariffs; US Treasury Secretary Besant: America First does not mean America "goes it alone"; US Fed Beige Book: Prospects in several regions have significantly deteriorated; Trump: Zelensky's remarks are very harmful to Russia-Ukraine peace talks; OPEC+ reportedly considers accelerating production increases for the second consecutive month in June; Trump says he may "significantly reduce" tariffs on China, Foreign Ministry responds; SGE adjusts gold and silver contract margins; Xiamen optimizes and upgrades housing ticket resettlement policy.

Spot market:

Shanghai: At the end of long-term contracts, zinc ingot supply in the Shanghai market remained limited yesterday, traders stood firm on quotes, spot premiums continued to rise, futures first rose then fell with the overall center moving up, downstream purchase willingness was not strong, and trading performance was average.

Guangdong: Spot premiums over Shanghai were 20 yuan/mt. Overall, zinc prices moved up yesterday, while spot premiums and discounts remained high, downstream purchasing sentiment weakened, and market trading pace slowed. As downstream companies had previously purchased at low points, they are now picking up goods to fulfill orders, and some traders saw good overall sales driven by pre-holiday stockpiling.

Tianjin: Tianjin reported premiums over Shanghai of around 90 yuan/mt. Zinc prices rose yesterday, downstream buyers were cautious about high prices and mostly held a wait-and-see attitude, traders continuously lowered premiums and discounts to sell, premiums fell, and overall trading was poor.

Ningbo: Spot quotes over Shanghai were at parity. Long-term contracts for the current month are nearing their end, fewer traders in the Ningbo market were selling yesterday, overall spot premiums remained high, and some downstream buyers began stockpiling for May Day, purchase willingness improved, and some traders reported better spot trading.

Social inventory: On April 23, LME zinc inventory fell by 7,200 mt to 185,025 mt, a decrease of 3.75%; according to SMM communication, as of April 21, SMM's seven-region zinc ingot inventory totaled 93,000 mt, down 12,600 mt from April 14 and down 7,000 mt from April 17, domestic inventory recorded a decrease.

Zinc price forecast: Overnight, LME zinc recorded a bullish candlestick, supported by the 5-day moving average, yesterday the Antamina copper-zinc mine had an unexpected accident and halted production, overseas mine disturbances resurfaced, and recent macro sentiment also eased, LME zinc rebounded from lows, with the center slightly moving up. Overnight, SHFE zinc recorded a bearish candlestick, suppressed by the 40-day moving average, macro recovery provided some support to zinc prices, but market concerns about downstream consumption persisted, SHFE zinc lacked upward momentum, maintaining a fluctuating trend.