The CPI performance in June was mild, and the center of LME zinc prices continued to pull back [SMM Morning Meeting Summary]

Futures Market:

Overnight, LME zinc opened at $2,740/mt. After opening, LME zinc touched a high of $2,734.5/mt, then fluctuated downward all the way below the daily average line, reaching a low of $2,687/mt during the night session. It slightly rose towards the end of the session, closing down at $2,701.5/mt, a drop of $31/mt or 1.13%. Trading volume decreased to 110,000 lots, while open interest increased by 183 lots to 194,000 lots. Overnight, SHFE zinc opened at 22,040 yuan/mt. After opening, SHFE zinc touched a high of 22,065 yuan/mt, then declined below the daily average line due to longs reducing their positions, reaching a low of 21,965 yuan/mt. Subsequently, it rose partially as bears reduced their positions, closing down at 22,005 yuan/mt, a drop of 80 yuan/mt or 0.36%. Trading volume decreased to 42,365 lots, while open interest decreased by 2,354 lots to 81,950 lots.

Macro: The overall CPI in the US rebounded slightly in June, while the core CPI fell short of expectations. The US Treasury Secretary said that the China-US negotiations were "going well". The White House denied that Trump had privately encouraged Ukraine to strike Moscow. Bessent: The formal process of selecting Powell's successor has begun. Oil prices fell for the sixth time this year, saving 5 yuan for a full tank. China's GDP grew by 5.3% YoY in H1. The State Council Information Office: Consumption policies will continue to be strengthened in H2.

Spot Market:

Shanghai: Yesterday, market traders continued to actively sell. In the morning, as zinc prices on the futures market pulled back, some downstream buyers placed orders to purchase, and some traders reported improved spot transactions, supporting the stable operation of spot premiums.

Guangdong: Overall, Guangdong's inventory increased by nearly 2,000 mt yesterday, and the market's spot circulation was loose. However, downstream consumption was sluggish. In this situation, although the futures market continued to decline yesterday, market transactions remained poor. The price spread between futures contracts widened, but spot premiums and discounts remained unchanged from the previous day due to demand influences.

Tianjin: Yesterday, the futures market continued to drop back slightly, but downstream demand was average, with no significant restocking sentiment, mainly driven by immediate needs. Traders' selling premiums and discounts remained stable, with trading dominated by traders, and overall market transactions were sluggish.

Ningbo: There were many traders selling in the Ningbo market, with some traders selling at low prices. Spot premiums continued to decline, and the futures market was in the doldrums. Some downstream buyers purchased at low prices, and overall spot transactions were moderate.

Social Inventory: On July 15, LME zinc inventory increased by 5,200 mt to 118,600 mt, a rise of 4.59%. According to SMM communication, as of Monday (July 14), the total zinc ingot inventory in seven locations tracked by SMM was 93,100 mt, an increase of 4,000 mt from July 7 and 2,800 mt from July 10, with domestic inventory recording an increase.

Zinc Price Outlook: Overnight, LME zinc recorded a bearish candlestick, with the 5-day moving average acting as resistance above and the 60-day moving average providing support below. The overall US CPI rebounded slightly in June, while core CPI fell short of expectations. The mild inflation report may prompt the US Fed to maintain interest rates unchanged for the time being. The US dollar index continued to rise, while overseas zinc inventory continued to increase, and the center of LME zinc prices kept declining. Overnight, SHFE zinc recorded a bearish candlestick, with the 60-day moving average acting as resistance above and the lower Bollinger Bands providing support below. China's GDP grew by 5.3% YoY in the first half of the year, and the State Council Information Office stated that consumption policies would continue to be strengthened in the second half. Additionally, the US Treasury Secretary said that the China-US negotiations were "in a good state," with strong macro support. However, the domestic fundamental pattern of strong supply and weak demand remained unchanged, and SHFE zinc was expected to remain in the doldrums.

Data Source Statement: Except for publicly available information, all other data are based on publicly available information, market exchanges, and rely on SMM's internal database models, processed by SMM, for reference only, and do not constitute decision-making advice.