LME zinc maintains fluctuating trend, waiting for the outcome of trade negotiations [SMM Zinc Morning Meeting Summary]

Zinc Morning Meeting Notes on July 30

  Futures Market: Overnight, LME zinc opened at $2,814/mt. After opening, LME zinc fluctuated downward along the daily average line, reaching a low of $2,790/mt during the night session. Subsequently, LME zinc rebounded all the way, hitting a high of $2,823/mt at the end of the session, and finally closed up at $2,814.5/mt, up $9/mt or 0.32%. Trading volume increased to 9,441 lots, and open interest increased by 1,083 lots to 190,000 lots. Overnight, the most-traded SHFE zinc 2509 contract opened at 22,640 yuan/mt. In the early session, SHFE zinc reached a low of 22,610 yuan/mt. After opening, SHFE zinc fluctuated upward along the daily average line, hitting a high of 22,735 yuan/mt at the end of the session, and finally closed up at 22,720 yuan/mt, up 65 yuan/mt or 0.29%. Trading volume decreased to 51,296 lots, and open interest increased by 1,110 lots to 119,000 lots.

Macro: Trump shortened the deadline for the ultimatum to Russia to 10 days; Trump will announce the pharmaceutical industry policy within the next two weeks; India may face tariffs of 20%-25%, but the agreement has not yet been finalised; Fed Governor Kugler was absent from this week's interest rate-setting meeting due to personal reasons; Thai military: Cambodia launched attacks again in violation of the ceasefire agreement; The PV Industry Association clarified rumors related to anti-"rat race" competition.

Spot Market:

Shanghai: Yesterday, the futures market fluctuated. Downstream enterprises continued to be bearish on zinc prices, resulting in low purchase willingness yesterday. Additionally, the high prices of domestically produced zinc ingots in Shanghai persisted, and downstream enterprises mostly purchased low-priced factory-pickup zinc ingots. Overall, spot transactions were mediocre, and spot premiums were basically stable.

Guangdong: There was a spot discount of 40 yuan/mt against Shanghai spot. Overall, zinc prices maintained a fluctuating trend yesterday. Market traders had a high reluctance to budge on prices. However, downstream consumption in Guangdong remained weak, and enterprises had low procurement enthusiasm, mostly making just-in-time procurement. Spot transactions were relatively mediocre.

Tianjin: There was a spot discount of 40 yuan/mt against Shanghai spot. The futures market continued to be in the doldrums. Downstream enterprises had a small amount of restocking, but still maintained a wait-and-see attitude, mainly making just-in-time restocking. Traders' quotes increased slightly, and premiums rose. Some traders focused on fulfilling long-term contracts. Overall, transactions were mediocre.

Ningbo: There was a spot premium of 10 yuan/mt against Shanghai spot. Traders in the Ningbo market were indifferent about selling, and overall premiums remained unchanged from the previous day. However, downstream enterprises had weak orders, and coupled with the futures market not continuing to decline, spot transactions were mediocre under just-in-time procurement.

Social Inventory: On July 29, LME zinc inventory decreased by 3,350 mt to 112,150 mt, a decrease of 2.9%. According to communication with SMM, as of July 28, the total inventory of zinc ingots in seven regions tracked by SMM was 103,700 mt, an increase of 11,100 mt from July 21 and an increase of 5,400 mt from July 24. Domestic inventory recorded an increase.

Zinc price forecast: Overnight, LME zinc recorded a small bullish candlestick, with the 5-day moving average above acting as resistance. The market continues to await the outcome of China-US trade negotiations, with investors remaining cautious. LME zinc maintained a fluctuating trend. Overnight, SHFE zinc recorded a bullish candlestick, with the 10-day moving average above acting as resistance. The fundamental supply-demand pattern of zinc remains unchanged, with strong supply and weak demand. However, with the rebound in black commodities, SHFE zinc also rose slightly in the night session. Attention should be paid to the recent outcome of China-US trade negotiations.

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 model. These data are for reference only and do not constitute decision-making advice.