Market rumors suggest that Trump will fire Powell. LME zinc records a four-day winning streak [SMM Morning Meeting Summary]

Futures Market:

Overnight, LME zinc opened at $2,702/mt. Subsequently, LME zinc briefly oscillated around the daily average line, before bulls reduced their positions, causing LME zinc to continuously decline below the daily average line. During this period, LME zinc attempted to rise above the daily average line but eventually faced resistance and pulled back, reaching a low of $2,676/mt. Entering the night session, LME zinc rapidly rose, touching a high of $2,715/mt, before slightly pulling back at the end of the session. It ultimately closed lower at $2,699.5/mt, down $2/mt or 0.07%. Trading volume decreased to 87,937 lots, while open interest decreased by 7,174 lots to 187,000 lots. Overnight, the most-traded SHFE zinc 2508 contract opened at 21,975 yuan/mt. After opening, SHFE zinc touched a low of 21,970 yuan/mt, before rapidly rising. However, bulls reduced their positions, causing SHFE zinc to continuously decline below the daily average line. Subsequently, bears reduced their positions, and SHFE zinc rose, touching a high of 22,120 yuan/mt. It ultimately closed higher at 22,100 yuan/mt, up 55 yuan/mt or 0.25%. Trading volume decreased to 37,483 lots, while open interest decreased by 5,592 lots to 72,719 lots.

Macro:

Trump denies plans to fire Powell; US PPI in June hits a new low since September 2024; EU proposes a seven-year budget of nearly 2 trillion euros; Trump may impose 10% or 15% tariffs on smaller countries; Iran: Ready to respond to any new military attacks; State Council Executive Meeting: Effectively regulate the competitive order of the NEV industry; National power load hits a new record high on the 16th.

Spot:

Shanghai: Yesterday, the futures market continued to decline, with downstream participants remaining bearish on prices and a wait-and-see sentiment emerging again. Purchasing and buying sentiment were generally subdued, with overall trading mainly occurring among traders.

Guangdong: Overall, yesterday saw contract rollover pricing in Guangdong. Downstream consumption remained relatively sluggish, while the fluctuating upward trend in the futures market reduced downstream purchase willingness, resulting in sluggish spot trading. Under these circumstances, traders found it difficult to sell goods, leading to continuous reductions in premiums and discounts for spot cargo, which continued to decline.

Tianjin: Yesterday, the futures market continued to slightly pull back, but downstream demand remained weak. Entering the off-season, downstream demand was mainly for immediate needs. Traders' premiums and discounts for selling goods slightly pulled back, and warrants would be released after delivery, resulting in sluggish overall market trading.

Ningbo: Some traders completed their sales the day before yesterday, and the number of traders offering quotes in the market yesterday decreased. However, downstream participants had accumulated certain inventories through previous purchases, and their buying sentiment was not high yesterday. With poor sales, spot premiums continued to be adjusted downward.

Social Inventory: On July 16, LME zinc inventory increased by 2,750 mt to 121,350 mt, a 2.32% increase. According to SMM's communication and understanding, as of Monday (July 14) this week, the total zinc ingot inventory across seven locations tracked by SMM was 93,100 mt, an increase of 4,000 mt from July 7 and an increase of 2,800 mt from July 10, indicating a rise in domestic inventory.

Zinc Price Forecast: Overnight, LME zinc recorded a four-day losing streak, with the 5/20-day moving averages above exerting pressure and the lower Bollinger Bands providing support. Market sentiment fluctuated significantly due to rumors that Trump would fire Powell. The US dollar index plunged during the session, while the US PPI in June hit a new low since September 2024, causing the center of LME zinc to continue to decline. Overnight, SHFE zinc recorded a bullish candlestick, with the 5/20-day moving averages above exerting pressure and the lower Bollinger Bands providing support. The current expectation of a loose supply side in China continues, weakening the support for SHFE zinc. Meanwhile, downstream consumption is weakening. However, with significant macro uncertainties, SHFE zinc is expected to remain in the doldrums in the short term.

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