LME inventory continues to destock, with the center of LME zinc prices moving upward [SMM Zinc Morning Meeting Summary]

SMM Zinc Morning Meeting Summary on July 9
Futures Market: Overnight, LME zinc opened at $2,688/mt. Initially, LME zinc briefly dipped to a low of $2,675.5/mt before bears reduced their positions, causing LME zinc to fluctuate upward, reaching a high of $2,740/mt at the close. It ultimately closed up at $2,719/mt, gaining $36/mt or 1.34%. Trading volume increased to 11,750 lots, while open interest decreased by 2,843 lots to 200,000 lots. Overnight, the most-traded SHFE zinc 2508 contract opened at 22,175 yuan/mt, hitting an intraday high immediately. It then quickly dipped to a low of 22,020 yuan/mt before bears reduced their positions, causing SHFE zinc to fluctuate upward. It ultimately closed up at 22,160 yuan/mt, gaining 110 yuan/mt or 0.5%. Trading volume decreased to 65,173 lots, while open interest decreased by 328 lots to 119,000 lots.
Macro: Trump: Will impose a 50% tariff on imported copper and possibly up to 200% on pharmaceuticals, and will soon announce tariffs on semiconductors; Trump: If Fed Chairman Powell misleads Congress, he should "resign immediately" and cut interest rates; US Commerce Secretary: Expects to send 15 to 20 more tariff letters in the next two days; US Defense Department announces more defensive weapons for Ukraine; RBA unexpectedly holds rates steady; Trump Media Group plans to launch a crypto blue-chip ETF; President Xi Jinping: Focus on building China's important energy and raw material base at a high level and constructing a new-type energy system; US media: US Treasury Secretary says plans to meet with China in the coming weeks to advance discussions on trade and other issues; Hong Kong SFC: Expands the scope of participants in the Southbound Bond Connect to include securities firms, insurance companies, wealth management and asset management companies.
Spot Market:
Shanghai: The domestic supply in the market is limited, with some traders maintaining high quotes. Despite the futures market significantly dropping below 22,000 yuan/mt, some downstream enterprises purchased at lower prices, but the rest mostly maintained their rigid demand, and spot premiums struggled to rise.
Guangdong: Overall, the futures market continued to decline yesterday, with the market seeing a slight increase in restocking at lower prices driven by low prices. Trading sentiment improved slightly, and spot premiums and discounts remained unchanged from the previous day.
Tianjin: The futures market continued to pull back yesterday, with downstream enterprises increasing restocking at lower prices. Restocking sentiment improved slightly, and traders' quotes increased slightly, leading to an overall improvement in market transactions.
Ningbo: The zinc ingot supply in the Ningbo market remains abundant, with traders actively selling. Despite the morning futures market decline, downstream enterprises still purchased according to demand, leading to limited overall improvement in spot transactions.
Social Inventory: On July 8, LME zinc inventory decreased by 2,100 mt to 108,500 mt, a decrease of 1.9%. According to SMM communications, as of Monday (July 7), the total zinc ingot inventory across seven locations tracked by SMM was 89,100 mt, an increase of 8,500 mt from June 30 and 6,700 mt from July 3, indicating a rise in domestic inventory.
Zinc Price Forecast: Overnight, LME zinc recorded a large bullish candlestick, with the 5/10-day moving average exerting pressure. LME zinc inventory continued destocking, with low inventory supporting zinc prices. Expectations for US Fed interest rate cut emerged again, pushing the center of LME zinc prices higher. Overnight, SHFE zinc recorded a long-lower-shadow bearish candlestick with no upper shadow, with the middle Bollinger Bands providing support. Macro sentiment was bullish, prompting some bears to take profits and exit the market. It is expected that SHFE zinc will consolidate with a sideways trend today.