Low overseas inventory continues to support the upward movement of the center of LME zinc [SMM Zinc Morning Meeting Summary]

SMM Zinc Morning Meeting Summary on July 11
Futures Market: Overnight, LME zinc opened at $2,738.5/mt. Early in the session, LME zinc briefly dipped to $2,735/mt before bears reduced their positions, causing LME zinc to fluctuate upward. It touched a high of $2,784/mt at the end of the session and closed up at $2,777/mt, gaining $34.5/mt or 1.26%. Trading volume increased to 13,460 lots, while open interest decreased by 7,587 lots to 191,000 lots. Overnight, the most-traded SHFE zinc 2508 contract opened at 22,390 yuan/mt. Early in the session, bears reduced their positions, causing SHFE zinc to quickly rise and touch a high of 22,475 yuan/mt. However, upward momentum waned, and the center pulled back. It closed up at 22,440 yuan/mt, gaining 55 yuan/mt or 0.25%. Trading volume decreased to 59,692 lots, while open interest decreased by 2,470 lots to 110,000 lots.
Macro: San Francisco Fed President Mary Daly said she is considering an interest rate cut in the fall and believes there will be two rate cuts this year. The US Secretary of Commerce will head to Japan next week. US media reported that Vietnam did not agree with Trump's self-announced tariff rates, as the tariff rates increased from 11% to 20%. It is reported that OPEC+ is considering suspending production increases from October and entering a wait-and-see period. The Ministry of Finance said that EU enterprises should be excluded from participating in government procurement projects for medical devices worth over 45 million yuan. The Ministry of Human Resources and Social Security and the Ministry of Finance announced a 2% increase in basic pensions for retirees. The Ministry of Commerce said that China and the US have maintained close communication at multiple levels on their respective concerns in the economic and trade fields. The Shanghai State-owned Assets Supervision and Administration Commission held a central group study session on the development trends and coping strategies of cryptocurrencies and stablecoins.
Spot Market:
Shanghai: Yesterday, the futures market continued to rise. Downstream buyers had a strong wait-and-see sentiment, and spot purchasing sentiment was low. Spot trading performance was poor, and market premiums continued to decline. Overall trading was still dominated by traders.
Guangdong: Overall, yesterday's futures market continued to rally. Downstream purchasing sentiment was low, with just-in-time procurement being the main focus. Spot trading was poor. Meanwhile, the price spread between futures contracts contracted yesterday, and spot premiums and discounts declined.
Tianjin: Yesterday, the futures market surged significantly. Downstream buyers were cautious due to high prices, and purchasing enthusiasm was low. Early in the session, traders' quotes remained stable, but later, they slightly lowered premiums to facilitate sales. Overall market trading was poor.
Ningbo: Yesterday, premium quotes in the Ningbo market remained stable. However, some traders were bearish on subsequent premiums and began to pre-sell zinc ingots at low prices. The futures market continued to rise compared to the previous day. Downstream buyers had some inventory from previous purchases and showed little purchasing sentiment yesterday. Spot trading in the market was poor.
Social Inventory: On July 10, LME zinc inventory decreased by 1,100 mt to 105,600 mt, a decline of 1.03%. According to SMM communication, as of Thursday (July 10) this week, the total inventory of zinc ingots in seven locations monitored by SMM was 90,300 mt, an increase of 7,200 mt from July 3 and an increase of 1,200 mt from July 7. Domestic inventory recorded an increase.
Zinc Price Forecast: Overnight, LME zinc recorded a large bullish candlestick, retracing to the 5/10-day moving average. There was almost no growth in overseas refined zinc production, coupled with a continuous decline in LME zinc ingot inventory. The excessively low zinc ingot inventory supported zinc prices. Macro-wise, expectations of an interest rate cut fluctuated, causing the center of LME zinc to move higher. Overnight, SHFE zinc recorded a small bullish candlestick. Benefiting from anti-cut-throat competition policies in China, black commodities continued to rally, driving SHFE zinc prices higher. Meanwhile, the strong rise in LME zinc also boosted SHFE zinc, causing the center of SHFE zinc to move higher. It is expected that SHFE zinc will mainly consolidate with a bias towards holding up well today.