Macro Disturbances Persist LME Zinc Center Continuously Declines [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc opened at $2,811/mt. At the beginning of the session, LME zinc briefly fell below the daily average line, then recovered and rose to above the daily average, peaking at $2,818.5/mt. However, with increased bearish positions, the center of LME zinc kept falling below the daily average, reaching a low of $2,753/mt during the night. It finally closed down at $2,764/mt, a decrease of $43/mt or 1.53%. Trading volume increased to 84,153 lots, and open interest increased by 964 lots to 192,000 lots. Overnight, the most-traded SHFE zinc 2510 contract opened lower with a gap at 22,210 yuan/mt. At the start of the session, SHFE zinc reached a high of 22,220 yuan/mt, but with increased bearish positions, it fell to 22,085 yuan/mt. Subsequently, as bearish positions decreased, SHFE zinc slightly rebounded near the daily average, fluctuating narrowly around 22,130 yuan/mt. It finally closed down at 22,120 yuan/mt, a decrease of 190 yuan/mt or 0.85%. Trading volume decreased to 77,880 lots, and open interest increased by 7,537 lots to 115,000 lots.

Macro: Vincent said that Trump's choice for Fed Chairman will definitely be known in the fall; White House: If India stops buying Russian oil, it can receive a 25% tariff discount; The EU is reportedly planning to propose the cancellation of tariffs on US industrial products this week; Vincent revealed that the government is not considering holding Nvidia shares; European countries are preparing to reimpose sanctions on Iran; The Ministry of Commerce will introduce several policy measures to expand service consumption in September; Jilin Province will implement a tax refund policy for overseas tourists' shopping from September 1st.

Spot:

Shanghai: As it was month-end settlement, the number of traders selling goods decreased yesterday, but the overall supply remained ample. Spot quotes were weak and stable, with futures zinc prices maintaining a fluctuating trend. Downstream enterprises also showed low purchasing enthusiasm, and spot transactions did not improve.

Guangdong: Overall, zinc prices increased MoM yesterday, leading to a fear of high prices among downstream enterprises, which reduced procurement demand. Market transactions worsened, and some traders had difficulty selling, slightly lowering premiums and discounts, resulting in lower spot premiums and discounts.

Tianjin: Yesterday, the futures market continued to fluctuate. Small and medium-sized factories had poor operations, and purchasing sentiment was weak. Large factories were waiting for long-term contracts to arrive, and overall purchasing enthusiasm was low. Traders maintained steady sales, and overall market transactions were poor.

Ningbo: There were few traders selling in the Ningbo market yesterday. Although some traders showed reluctance to budge on prices, under the fluctuating futures market, downstream enterprises purchased as needed, and spot transactions showed mediocre performance, with stable spot quotes.

Social Inventory: On August 27th, LME zinc inventory decreased by 5,500 mt to 60,025 mt, a decline of 8.39%. According to SMM, as of Monday, the total zinc ingot inventory in seven locations was 138,500 mt, an increase of 3,100 mt from August 18th and 5,600 mt from August 21st, indicating an increase in domestic inventory.

Zinc Price Forecast: Overnight, LME zinc recorded a large bearish candlestick, with the 60-day moving average providing support below. The current crisis of US Fed independence is intensifying, and the US dollar index saw an inverted V-shaped reversal yesterday, while some international regions are still affected by tariff disruptions, leading to a downward shift in the center of LME zinc. Overnight, SHFE zinc also recorded a bearish candlestick, with support provided by the lower Bollinger Band. Influenced by the overseas market, SHFE zinc opened lower with a gap last night. Domestic supply is relatively ample, and overall market demand still exhibits certain off-season characteristics. However, the traditional September-October peak season is approaching, coupled with continuously decreasing overseas inventories. It is expected that SHFE zinc will remain in the doldrums, and subsequent attention should be paid to actual consumption conditions.

Data Source Statement: Apart from publicly available information, other data is processed by SMM based on public information, market exchanges, and SMM's internal database model, for reference only and not as a basis for decision-making.