Foreign media reports that Iran is seeking talks with the US and Israel; LME zinc records a large bullish candlestick [SMM Morning Meeting Summary]

Futures Market:

Overnight, LME zinc opened at $2,620/mt. Initially, LME zinc fluctuated around the daily average line, dipping to a low of $2,610.5/mt during the session. Subsequently, it quickly rose above the daily average line, hitting a high of $2,665/mt. Entering the night session, LME zinc briefly dipped below the daily average line but recovered some of the losses towards the end of the session, closing up at $2,660/mt, up $33.5/mt or 1.28%. Trading volume decreased to 124,000 lots, while open interest increased by 41,145 lots to 248,000 lots. Overnight, the most-traded SHFE zinc 2507 contract opened higher with a gap at 29,155 yuan/mt. After opening, SHFE zinc immediately hit a high of 21,985 yuan/mt, then fluctuated downward below the daily average line to a low of 21,865 yuan/mt. Subsequently, it rose above the daily average line, with the price center fluctuating around 21,950 yuan/mt. Towards the end of the session, bulls reduced their positions, causing SHFE zinc to dip slightly, closing up at 21,935 yuan/mt, up 95 yuan/mt or 0.43%. Trading volume decreased to 58,178 lots, while open interest decreased by 4,413 lots to 11,200 lots.

Macro:

Trump: Will temporarily suspend sanctions on Russia; Netanyahu does not rule out the possibility of assassinating Khamenei; Foreign media: Iran seeks talks with the US and Israel to end hostilities; US aircraft carrier "Nimitz" heads to the Middle East; US government may ban citizens from 36 more countries from entering; US media: OpenAI's partnership with Microsoft is at risk; National Bureau of Statistics: In May, total retail sales of consumer goods increased by 6.4% YoY; Paul Chan: The Hong Kong Monetary Authority will process stablecoin license applications as soon as possible.

Spot:

Shanghai: Over the weekend, a large quantity of Kirin zinc ingots arrived in Shanghai. Yesterday, many traders in the market were selling, and premium quotes continued to decline. The futures market remained at a low level, but some downstream enterprises placed orders at even lower prices, which did not reach their psychological price levels. Yesterday, downstream enterprises that made purchases basically maintained just-in-time demand, and overall trading did not show significant improvement.

Guangdong: Overall, the futures market maintained a fluctuating trend yesterday. Meanwhile, downstream consumption was sluggish, and enterprises had low enthusiasm for purchasing. Under these circumstances, traders faced difficulties in selling, so they slightly lowered their premium quotes for selling. The market trading atmosphere was sluggish.

Tianjin: The futures market continued to pull back. Downstream enterprises had relatively large raw material inventories and low enthusiasm for purchasing. Many traders had delivery plans and sold less. Overall, premiums remained stable, and overall market trading was weak.

Ningbo: The futures market remained at a low level. Additionally, some traders continued to sell Kirin zinc ingots at low prices. Yesterday, the overall premium in Ningbo did not change much. Some downstream enterprises purchased on dips, and spot trading performance was moderate.

Social Inventory: On June 16, LME zinc inventory decreased by 775 mt to 130,225 mt, a decrease of 0.59%. According to communication with SMM, as of Monday (June 16), the total zinc ingot inventory in seven locations tracked by SMM was 78,100 mt, a decrease of 3,600 mt from June 9 and an increase of 1,000 mt from June 12. Domestic inventory recorded an increase.

Zinc price forecast: Overnight, the LME zinc contract recorded a large bullish candlestick, with the middle band of the Bollinger Bands acting as resistance above. Foreign media reported that Iran is seeking talks with the US and Israel to end hostilities, while Trump also indicated a temporary suspension of sanctions against Russia. This has eased market sentiment, causing the center of LME zinc to move higher. Overnight, the SHFE zinc recorded a bearish candlestick, with the 10/60-day daily average acting as resistance above. Currently, downstream consumption is gradually weakening, and supply-side increases are expected to be continuously released. It is anticipated that demand support for zinc prices will continue to diminish, with zinc prices expected to remain in the doldrums in the short term.