US dollar index rose, LME zinc recorded a small bearish candlestick [SMM Zinc Morning Meeting Summary]

SMM August 19 Zinc Morning Meeting Summary

Futures: Overnight, LME zinc opened at $2,799/mt. At the start of the session, LME zinc briefly rose to a high of $2,805.5/mt. Subsequently, with an increase in short positions, LME zinc fluctuated downward, reaching a low of $2,773/mt during European trading hours, and finally closed down at $2,784/mt, a decrease of $12.5/mt or 0.45%. Trading volume dropped to 8,911 lots, while open interest increased by 3,010 lots to 194,000 lots. Overnight, the most-traded SHFE zinc 2510 contract opened at 22,320 yuan/mt. At the beginning of the session, it briefly rose to 22,345 yuan/mt. With an increase in short positions and insufficient upward momentum, the center pulled back, reaching a low of 22,245 yuan/mt towards the end of the session, and finally closed down at 22,255 yuan/mt, a decrease of 105 yuan/mt or 0.47%. Trading volume fell to 39,000 lots, while open interest increased by 4,103 lots to 10.1 lots.

Macro: Trump: Arranging a meeting between Putin and Zelensky, location to be determined, followed by a trilateral meeting; Hamas agrees to new Gaza ceasefire proposal put forward by mediators; The Shanghai Composite Index hit a nearly 10-year high intraday on Monday, with the total market value of A-shares breaking through the 10 trillion yuan mark; Premier Li Qiang: Continuously stimulating consumption potential; Taking strong measures to consolidate the stabilization trend of the real estate market; Ministry of Commerce: Extending the anti-subsidy investigation period for imported dairy products originating from the EU.

Spot Market: Shanghai: The futures market weakened MoM yesterday, but downstream buyers continued to expect lower prices, resulting in few inquiries. Spot transactions did not show significant improvement, and there was insufficient upward momentum for spot premiums. Traders maintained stable spot quotations, and spot trades were mainly among traders.

Guangdong: Overall, Guangdong saw contract rollover quotes yesterday. The center of the futures market showed a slight decline MoM. Driven by lower prices, downstream buyers made just-in-time procurement. Although market transactions improved slightly, they remained generally weak.

Tianjin: The futures market continued to decline yesterday. However, as small factories gradually suspended operations, downstream demand weakened, and purchases were mostly from large factories. These large factories preferred to buy cheaper delivered zinc ingots, leading to sluggish warehouse zinc ingot sales. Traders maintained stable premium offers, with some traders lowering premiums due to bearish expectations, resulting in average overall transactions.

Ningbo: In the Ningbo market, many traders were selling, with some offering discounts, leading to chaotic premium quotes. Spot premiums continued to decline. Despite a slight drop in the futures market, enterprises still expected further declines, making few purchases at low points. Transactions were mainly driven by just-in-time procurement.

Social Inventory: On August 18, LME zinc inventory decreased by 475 mt to 75,850 mt, a decline of 0.62%. According to SMM, as of Monday (August 18), the total zinc ingot inventory in seven locations was 135,400 mt, an increase of 16,300 mt from August 11 and 6,200 mt from August 14, indicating an increase in domestic inventory.

Zinc Price Forecast: Overnight, LME zinc recorded a small bearish candlestick. Expectations for an interest rate cut fluctuated on the macro level, and the US dollar index rose, putting pressure on non-ferrous metals. The market is concerned about the zinc demand outlook, leading to a decline in LME zinc. Overnight, SHFE zinc also recorded a small bearish candlestick. Domestic inventory continued to increase, and the surplus situation of zinc remains unchanged. Currently, consumption still shows weakness, and with the macro sentiment fluctuating, the center of SHFE zinc has shifted downward. More macro guidance is awaited, and it is expected that SHFE zinc will mainly consolidate today.

Data Source Statement: Apart from publicly available information, other data are derived from public information, market exchanges, and SMM's internal database model, processed by SMM for reference only and do not constitute decision-making advice.