Tariff issues recur, center of LME zinc rises [SMM Zinc Morning Meeting Summary]

SMM Zinc Morning Meeting Summary on July 10
Futures: Overnight, LME zinc opened at $2,715/mt. Initially, LME zinc briefly dipped to $2,708/mt before bears reduced their positions, causing LME zinc to fluctuate upward and reach a high of $2,746/mt at the close. It ultimately closed up at $2,742.5/mt, gaining $23.5/mt or 0.86%. Trading volume decreased to 8,915 lots, while open interest fell by 1,449 lots to 198,000 lots. Overnight, the most-traded SHFE zinc 2508 contract opened at 22,120 yuan/mt. Initially, bears reduced their positions, causing SHFE zinc to fluctuate upward and reach a high of 22,280 yuan/mt at the close. It ultimately closed up at 22,220 yuan/mt, gaining 100 yuan/mt or 0.45%. Trading volume decreased to 58,636 lots, while open interest fell by 3,719 lots to 111,000 lots.
Macro: Trump sent tariff letters to eight countries again, with Brazil facing a 50% tariff. US Fed meeting minutes: The US Fed was divided into three factions regarding interest rate cuts. Trump once again called for the US Fed to cut interest rates. EU: The goal is to reach a trade agreement with the US by August 1, and it may even be reached in the coming days. US Commerce Secretary Lutnick said he plans to meet with China in early August. China's economic growth during the "14th Five-Year Plan" period is expected to exceed 35 trillion yuan. National Bureau of Statistics: CPI rose 0.1% YoY in June, while PPI fell 3.6% YoY. The State Administration for Market Regulation held a symposium on fair competition for enterprises, with Vipshop, NetEase, SF Express, etc. participating.
Spot Market:
Shanghai: The futures market rebounded significantly compared to the previous day. Downstream buyers, who had purchased at lower prices earlier, showed less enthusiasm for purchasing today. Traders faced difficulties in selling, leading to a decrease in spot premiums. Overall trading activity turned worse MoM.
Guangdong: Overall, yesterday's futures market rise dampened downstream purchasing enthusiasm, leading to a weaker trading atmosphere. Traders faced difficulties in selling, and spot premiums and discounts fell.
Tianjin: Yesterday's futures market maintained a fluctuating trend. Downstream purchasing enthusiasm was low, and restocking sentiment weakened. Traders maintained stable quotes, with trading activity dominated by traders. Overall market transactions turned weaker.
Ningbo: Yesterday, traders continued to actively sell, but with zinc prices on the futures market rebounding to over 22,000 yuan/mt, downstream buyers maintained just-in-time demand, primarily focusing on backward pricing. Spot transactions were generally average, and spot premiums decreased MoM.
Social Inventory: On July 9, LME zinc inventory fell by 1,800 mt to 106,700 mt, a decrease of 1.66%. 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 an increase of 6,700 mt from July 3. Domestic inventory recorded an increase.
Zinc Price Forecast: Overnight, LME zinc recorded a large bullish candlestick, retracing to the 5/10-day moving average. With recurring tariff issues, the market remained cautious. However, LME zinc inventory continued destocking to a low point, with low inventory supporting zinc prices, and the center of LME zinc prices shifted upwards. Overnight, SHFE zinc also recorded a large bullish candlestick, under pressure from the 5-day moving average above. The recurring tariff issues and the resulting uncertainties led some bears to take profits and exit the market, causing the center of SHFE zinc prices to shift upwards. It is expected that SHFE zinc will consolidate with a volatile trend today.