Macro uncertainties still exist. It is expected that LME zinc will maintain fluctuating trend [SMM Morning Meeting Minutes]

Futures Market: Last Friday, LME zinc opened at $2,646.5/mt. Early in the session, LME zinc briefly rose to a high of $2,654.5/mt before lacking upward momentum and declining steadily. It hit a low of $2,622.5/mt during European trading hours. Subsequently, bulls increased their positions, causing LME zinc to fluctuate upward. It eventually closed higher at $2,649.5/mt, up $2.5/mt or 0.09%. Trading volume increased to 6,815 lots, and open interest rose by 1,564 lots to 208,000 lots. Last Friday, the most-traded SHFE zinc 2508 contract opened at 21,740 yuan/mt. Early in the session, bulls increased their positions, driving SHFE zinc rapidly up to a high of 27,800 yuan/mt. Later, bulls reduced their positions, causing SHFE zinc's center to pull back below the daily average line and fluctuate. It hit a low of 21,705 yuan/mt during the session. It eventually closed higher at 21,750 yuan/mt, up 75 yuan/mt or 0.35%. Trading volume decreased to 39,302 lots, and open interest rose by 1,173 lots to 106,000 lots.

Macro: Trump questioned why the Iranian regime couldn't be changed. An advisor to Iran's Supreme Leader stated that enriched uranium materials are still in play and the game isn't over. The US disclosed details of its operation to strike Iranian nuclear facilities. The Iranian Parliament voted in favor of closing the Strait of Hormuz. The US Fed's monetary policy report stated that inflation is "slightly high" and the job market is "in good condition." India's Home Minister stated that the country would never resume implementing the Indus Waters Treaty. The PBOC kept the one-year and five-year LPR unchanged at 3% and 3.5%, respectively. The Cross-border Payment Link was officially launched, with the first remittance transaction landing in Shenzhen.

Spot Market:

Shanghai: Last Friday, the futures market fluctuated. However, downstream players had a strong wait-and-see sentiment today after purchasing on Thursday. Spot transactions turned worse MoM. Market traders faced difficulties in selling, and domestic spot premiums continued to decline.

Guangdong: Last Friday, the futures market maintained a fluctuating trend. The decline in the market during the second trading session led to some improvement in traders' selling. However, overall downstream consumption is gradually weakening. Last Friday, premiums and discounts continued to decline.

Tianjin: The futures market continued to fluctuate. Rain in the north affected construction, and downstream consumption was weak. Just-in-time procurement was the main activity. Traders who hadn't sold continued to lower premiums, resulting in weak overall market transactions.

Ningbo: Last Friday, the market still had an ample supply of zinc ingots, and the futures market maintained a fluctuating trend. However, some downstream players purchased at low levels on Thursday and had lower purchase willingness on Friday. Spot transactions turned worse, and market spot premiums also declined.

Social Inventory: On June 20, LME zinc inventory decreased by 1,250 mt to 126,225 mt, down 0.98%. According to SMM's communication, as of June 19, the total zinc ingot inventory across seven locations tracked by SMM 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: Last Friday, LME zinc recorded a long lower shadow bullish candlestick, with the 20/40-day moving averages above exerting pressure. The rise in US inflation expectations and the US Fed's cautious stance influenced market expectations regarding the number of interest rate cuts by the US Fed this year. However, market concerns over geopolitical conflict risks have somewhat eased, leading to a slight upward movement in LME zinc. It is expected that LME zinc will continue to oscillate today. Last Friday, SHFE zinc recorded a small bullish candlestick, with macro sentiment showing some improvement. However, domestic consumption is gradually weakening, and inventory buildup is gradually materializing. It is expected that SHFE zinc will continue to oscillate today.