Market Risk-Aversion Sentiment Strong, LME Zinc Records a Bullish Candlestick with No Upper Shadow [SMM Morning Meeting Summary]

Futures Market: Overnight, LME zinc opened at $2,636/mt. Early in the session, LME zinc continued to decline below the daily moving average, hitting a low of $2,631/mt during European trading hours. Subsequently, bears reduced their positions, and LME zinc fluctuated upward above the daily moving average, reaching a high of $2,647.5/mt at the end of the session. It finally closed up at $2,646.5/mt, up $3/mt or 0.11%. Trading volume decreased to 59,743 lots, and open interest decreased by 1,497 lots to 206,000 lots. Overnight, the most-traded SHFE zinc 2507 contract opened higher with a gap at 21,925 yuan/mt. Early in the session, SHFE zinc immediately reached a high of 21,985 yuan/mt. Subsequently, bulls reduced their positions, and SHFE zinc rapidly declined below the daily moving average, hitting a low of 21,865 yuan/mt. Then, the center of SHFE zinc moved slightly upward, and it finally closed at 21,890 yuan/mt, up 25 yuan/mt or 0.11%. Trading volume decreased to 41,820 lots, and open interest decreased by 1,587 lots to 86,152 lots.

Macro: Trump: Powell is a disgrace to the US; Trump says there is a "good chance" of negotiating with Iran and will decide within two weeks whether to attack Iran; Israeli Defense Minister: Eliminating Khamenei is one of the goals of this operation; Bank of England maintains interest rates at 4.25%, with voting ratios indicating increased internal divisions; EU is pushing for a UK-style trade deal with the US; Xi Jinping had a phone call with Russian President Putin, focusing on exchanging views on the Middle East situation; China Securities Index: Will launch the CSI Sci-Tech Innovation and Entrepreneurship Semiconductor Index.

Spot: Shanghai: Market traders actively sold off, with premium quotes continuing to decline slightly. The futures market also fell, but enterprises still purchased according to orders. Yesterday's spot transactions showed little improvement compared to the previous day, and market trading was slightly mediocre.

Guangdong: Overall, downstream demand in Guangdong is currently weak, and spot premiums and discounts have declined significantly. Although yesterday's decline in the futures market led some downstream players to restock at lower levels, overall spot transactions in the market remained relatively average. Based on the current situation, it is expected that premiums and discounts in Guangdong will continue to decline.

Tianjin: The futures market pulled back slightly, but downstream consumption was weak, and purchasing sentiment was not high. Trading was mainly among traders, with premiums continuing to decline. Overall market transactions were weak.

Ningbo: Yesterday, the futures market pulled back slightly, and some downstream players purchased at lower levels to restock. Spot transaction performance was moderate, but the overall market supply was ample. Harbin Zinc also arrived in the Ningbo market, and premiums continued to decline yesterday.

Social Inventory: On June 19, LME zinc inventory decreased by 775 mt to 127,475 mt, a decline of 0.60%. According to SMM communications, as of Thursday (June 19), the total zinc ingot inventory in SMM's seven locations was 79,600 mt, an increase of 2,500 mt from June 12 and an increase of 1,500 mt from June 16. Domestic inventory recorded an increase.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a bullish candlestick without an upper shadow, with the 10/60-day moving averages acting as resistance. As the US Fed has held off on interest rate cuts four times in a row, Trump expressed dissatisfaction with Powell. Meanwhile, due to market concerns about the escalation of the Israel-Iran conflict, the overall risk-averse sentiment was strong, leading to a "V"-shaped reversal in LME zinc. Overnight, the SHFE zinc recorded a bearish candlestick, with the 20/60-day moving averages acting as resistance. Affected by tensions in the Middle East and driven by the LME, SHFE zinc opened higher with a gap. However, due to insufficient support from domestic fundamentals for zinc prices, SHFE zinc fluctuated and pulled back. In the short term, zinc prices are expected to remain in the doldrums.