US Dollar Index and Inventory Both Decline, LME Zinc Records a Bullish Candlestick [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc opened at $2,764/mt. At the beginning of the session, LME zinc fluctuated along the daily average line. Subsequently, LME zinc continuously surged above the daily average line but kept pulling back to a low of $2,754/mt under the influence of bulls reducing positions. Entering the night session, LME zinc continued to rise and finally closed up at $2,787/mt, an increase of $23/mt, or 0.83%. Trading volume increased to 93,320 lots, while open interest decreased by 372 lots to 192,000 lots. Overnight, SHFE zinc opened at 22,145 yuan/mt. After briefly touching a high of 22,155 yuan/mt, SHFE zinc rapidly declined to a low of 22,030 yuan/mt due to bears increasing their positions. Then, as bears reduced their positions, SHFE zinc's center moved above the daily average line, closing down at 22,100 yuan/mt, a decrease of 70 yuan/mt, or 0.32%. Trading volume increased to 63,098 lots, while open interest increased by 2,485 lots to 117,000 lots.

Macro: Cook officially sues Trump; US judge sets hearing for this Friday; Fed governor candidate Moore may make it in time for the September rate decision; Fed Governor Waller reiterates support for a 25-basis-point cut in September; India's imports of Russian oil expected to increase despite US tariff threats; US ends small package tariff exemption, imposing a uniform tariff of $80-200; Cambrian: Stock price risks detaching from current fundamentals.

Spot:

Shanghai: With a noticeable decline in zinc prices, downstream enterprises have been continuously pricing since last night's session and purchasing at lower prices in the morning, improving purchase sentiment. Market traders were also actively trading, with spot quotations rising and spot transactions improving MoM.

Guangdong: Overall, today's futures center was lower MoM. Some traders saw improved sales, and downstream enterprises increased point pricing purchases, driving premiums and discounts higher. However, due to the still abundant supply of spot goods, overall market transactions did not change much, with only a slight increase in premiums and discounts today.

Tianjin: Today, the futures market showed a significant pullback. Enterprises increased purchases at lower prices, but due to vehicle restrictions, most shipments can only be made in early September. Nevertheless, overall transactions improved, with traders slightly raising their selling premiums. Traders were actively trading, and overall market transactions were better than yesterday.

Ningbo: There was limited cargo availability in Ningbo today, and with the falling futures, downstream buyers actively priced at lower levels. Traders raised their spot quotations accordingly, and overall spot transactions were moderate.

Social inventory: On August 28, LME zinc inventory decreased by 2,025 mt to 58,000 mt, a 3.37% decline. According to SMM, as of Thursday, the total zinc ingot inventory in seven regions was 144,500 mt, an increase of 11,600 mt from August 21 and 6,000 mt from August 25, indicating an increase in domestic inventory.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a bullish candlestick, with the 10/20-day moving averages exerting pressure from above and the 60-day moving average providing support from below. Currently, the independence of the US Fed is under some threat, leading to a strong wait-and-see sentiment in the market. Meanwhile, some US Fed governors reiterated their support for a 25-basis-point interest rate cut in September. Coupled with the fluctuating downward trend of the US dollar index and the continuous decrease in overseas inventories, the LME zinc contract recorded a bullish candlestick. Overnight, SHFE zinc recorded a bearish candlestick, with various moving averages exerting pressure from above. According to SMM data, as of August 28, domestic social inventory continued to increase, surpassing 140,000 mt. However, recent minor improvements in consumption in certain downstream sectors, along with support from low overseas inventories, suggest that SHFE zinc will continue to be in the doldrums.

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.