Abnormalities emerged in the overseas supply side, and LME zinc continued to rise [SMM Morning Meeting Summary]

Futures Market: Overnight, LME zinc opened at $2,710/mt. Initially, LME zinc briefly dipped to a low of $2,708.5/mt before bears reduced their positions, causing LME zinc to fluctuate upward, reaching a high of $2,775/mt at the close. It ultimately closed up at $2,770/mt, gaining $60/mt or 2.21%. Trading volume increased to 15,465 lots, while open interest decreased by 1,261 lots to 211,000 lots. Overnight, the most-traded SHFE zinc 2508 contract opened at 22,345 yuan/mt. Initially, SHFE zinc dipped slightly to a low of 22,270 yuan/mt before bulls increased their positions, causing SHFE zinc to fluctuate upward, reaching a high of 22,475 yuan/mt at the close. It ultimately closed up at 22,450 yuan/mt, gaining 210 yuan/mt or 0.94%. Trading volume decreased to 96,319 lots, while open interest increased by 3,796 lots to 139,000 lots.

Macro: White House: There are no plans to extend the tariff suspension period beyond July 9th; any changes will be decided by the President. Iranian Foreign Minister: Currently, Iran has no plans to restart nuclear negotiations. Bessent urges Congress to remove the "899 retaliatory tax clause." Goolsbee: Trump's premature announcement of Powell's successor will have no impact on the FOMC. China's self-developed new-generation domestic general-purpose processor, Loongson 3C6000, is released. Honor officially takes a crucial step towards A-share IPO. National Development and Reform Commission (NDRC): The third batch of trade-in funds for consumer goods will be allocated in July.

Spot Market:

Shanghai: Entering a new long-term contract cycle, the number of traders shipping goods in the Shanghai market increased yesterday. The futures market also fluctuated at highs, with downstream buying sentiment remaining low and spot trading performance being poor. Shanghai spot premiums weakened MoM.

Guangdong: Overall, the futures market continued to fluctuate upward yesterday. Downstream fear of high prices emerged, with most purchases being just-in-time procurement, and market trading being relatively average. Meanwhile, the price spread between futures contracts contracted yesterday, causing Guangdong spot premiums to decline accordingly.

Tianjin: Zinc prices continued to fluctuate at relatively high levels. Downstream buyers were cautious due to fear of high prices, and with the implementation of new long-term contracts, some downstream buyers waited for long-term contracts, resulting in fewer inquiries. Traders continued to lower premiums to ship goods, causing premiums to decline continuously and overall market trading to be weak.

Ningbo: The futures market continued to rise compared to the previous day. Downstream buyers remained cautious and continued to purchase as needed. Yesterday, traders in the Ningbo market shipped goods in a laid-back manner. Overall, spot premiums changed little, and spot trading performance was poor.

Social Inventory: On June 26th, LME zinc inventory decreased by 3,025 mt to 119,850 mt, a decline of 2.46%. According to SMM communications, as of Thursday (June 26th), the total zinc ingot inventory in seven locations tracked by SMM was 79,500 mt, a decrease of 100 mt from June 19th and an increase of 1,700 mt from June 23rd. Domestic inventory recorded an increase.

Zinc Price Outlook: Overnight, LME zinc recorded a large bullish candlestick. Expectations of a significant interest rate cut in the US have resurfaced, causing the US dollar index to fall to a low point, which is bullish for LME zinc. From a fundamental perspective, the workers' union at Nexa's only Cajamarquilla zinc smelter in Peru, with an annual capacity of 344,000 mt, announced a strike on June 25th, with the resumption time unknown. Additionally, LME zinc ingot inventory is running at low levels, boosting LME zinc upward. It is expected that zinc prices will continue to fluctuate at highs today. Overnight, the most-traded SHFE zinc contract recorded a small bullish candlestick. Domestically, driven by overseas market sentiment and influenced by news of a strike at a Peruvian smelter, SHFE zinc followed the LME upward. The expectation of domestic inventory buildup fluctuated, but the relatively low social inventory of zinc ingots continued to support zinc prices. It is expected that SHFE zinc will continue to fluctuate at highs today.