Overseas Macro Sentiment Fades, LME Zinc Declines [SMM Zinc Morning Meeting Summary]

SMM August 18 Zinc Morning Meeting Summary
Futures: On Friday, LME zinc opened at $2,843.5/mt, briefly rising to a high of $2,847/mt at the start of the session. Subsequently, with longs reducing positions, LME zinc fluctuated downward, hitting a low of $2,790/mt near the end of the session, and finally closed at $2,796.5/mt, down $46/mt or 1.62%. Trading volume increased to 10,973 lots, while open interest decreased by 2,725 lots to 191,000 lots. The most-traded SHFE zinc 2509 contract opened at 22,545 yuan/mt, quickly reaching a high of 22,580 yuan/mt at the beginning of the session. With shorts reducing positions and upward momentum weakening, the price center pulled back to a low of 22,465 yuan/mt, and finally closed at 22,505 yuan/mt, up 25 yuan/mt or 0.05%. Trading volume increased to 83,222 lots, while open interest decreased by 4,451 lots to 76,347 lots.
Macro: Trump: Major progress made on Russia, giving this meeting a 10 out of 10; US envoy says Putin has agreed to "NATO-like Article 5" security guarantees for Ukraine; Zelensky to meet with Trump in Washington on Monday, European leaders also heading to Washington; Trump: Steel and chip tariffs to be determined within two weeks, semiconductor tariffs could reach as high as 300%; US Fed's Daly: Believes that two rate cuts this year is still a good prediction; Goolsbee: Latest inflation data is concerning; Japan to approve first yen-denominated stablecoin JPYC; Relevant national departments: Studying and formulating policies and measures to promote the development of the marine industry, actively exploring ways to encourage central state-owned enterprises and social capital to participate in the development of the marine economy; Central Bank: Implementing and refining moderately loose monetary policy.
Spot Market:
Shanghai: Futures maintained a fluctuating trend. In the morning, some traders showed reluctance to budge on prices, widening the premium over the average price. However, downstream orders were moderate, and raw material purchases remained at a basic level. Factory pick-up prices stayed low, and overall trading was mediocre. Spot premiums lacked upward momentum and continued to be in the doldrums.
Guangdong: Overall, although zinc prices showed a downward trend on Friday, the price center was basically flat compared to Thursday. Downstream purchasing enthusiasm was low, and overall trading was moderate. Spot premiums and discounts remained unchanged from Thursday.
Tianjin: Futures continued to decline on Friday. Near the weekend, some downstream buyers restocked at lower prices, but overall, purchases were still driven by basic needs. With deliveries on Friday, traders' selling premiums remained stable, and overall trading was moderate.
Ningbo: There were many traders offering goods in the Ningbo market. Spot premiums showed no improvement on Friday. Futures maintained a fluctuating trend. Some downstream buyers had a certain amount of raw material inventory, leading to low inquiry and purchase interest on Friday, and overall trading was mediocre.
Social inventory: On August 15, LME zinc inventory decreased by 1,125 mt to 76,325 mt, a decline of 1.4%; according to SMM communication, as of Thursday (August 14), the total zinc ingot inventory in seven locations was 129,200 mt, an increase of 10,000 mt from August 11 and an increase of 16,000 mt from August 7, with domestic inventory recording an increase.
Zinc price forecast: Last Friday, LME zinc recorded a large bearish candlestick; US PPI increased unexpectedly, overseas funds took profits and exited, and macro expectations for interest rate cuts fluctuated, leading LME zinc to decline. Last Friday, SHFE zinc recorded a small bearish candlestick; under profit incentives, domestic smelting continued to expand, domestic inventory increased significantly, and with fluctuating macro sentiment, the center of SHFE zinc moved downward. It is expected that SHFE zinc will mainly consolidate today.

Data source statement: Apart from public information, other data are processed by SMM based on public information, market exchanges, and SMM's internal database model, for reference only and not intended as decision-making advice.