Non-Farm Payrolls Data Disappointed, LME Zinc Recorded a Bullish Candlestick [SMM Morning Meeting Summary]

Futures: Last Friday, LME zinc opened at $2,841.5/mt, initially dipped to $2,836.5/mt, then rose steadily above the daily average line to touch $2,885/mt. During the night session, it pulled back below the daily average line, finally closing up at $2,857.5/mt, up $19.5/mt (0.69%). Trading volume decreased to 87,907 lots, while open interest increased by 1,037 lots to 199,000 lots. Last Friday, the most-traded SHFE zinc 2510 contract opened at 22,250 yuan/mt. After opening, bears reduced positions, pushing zinc up to 22,350 yuan/mt. Subsequently, bears increased positions, driving zinc down below the daily average line to touch 22,150 yuan/mt. At the end of the session, bears reduced positions again, stabilizing zinc to maintain a fluctuating trend, finally closing up at 22,170 yuan/mt, up 15 yuan/mt (0.07%). Trading volume decreased to 79,306 lots, while open interest dropped by 3,363 lots to 108,000 lots.

Macro: Nonfarm payroll growth fell far below expectations, with June data revised down to negative; Trump released the final candidate list for Fed Chairman; Trump: Prepared to impose second-phase sanctions on Russia; Japanese Prime Minister Shigeru Ishiba announced his resignation as LDP president; OPEC+ members agreed to increase oil production by 137,000 b/d in October; PBOC added gold reserves for the 10th consecutive month; Putin said Russia would reciprocate visa-free policies with China.

Spot:

Shanghai: Last Friday, the purchasing sentiment for refined zinc in Shanghai was 2.55, while the selling sentiment was 2.83. In the morning, futures fluctuated at lows, with market traders mainly selling. Spot quotes remained stable. Downstream enterprises had mostly locked in prices the previous day, so they mostly watched zinc price movements last Friday, with purchase inquiries down MoM. Spot premiums struggled to rise.

Guangdong: Last Friday, the purchasing sentiment for refined zinc in Guangdong was 2.1, while the selling sentiment was 2.78. Overall, zinc prices rose last Friday, showing high downstream sentiment. Combined with downstream restocking at low prices the previous day, market trading was sluggish. Traders continuously lowered premiums/discounts to sell, leading to a noticeable decline in spot premiums/discounts.

Tianjin: Last Friday, the purchasing sentiment for refined zinc in Tianjin was 2.29, while the selling sentiment was 2.68. Zinc prices continued in the doldrums last Friday. Downstream enterprises received previously locked-price zinc ingots, resulting in generally weak purchasing sentiment. Downstream demand remained weak, with traders' selling prices slightly stable. Direct trader transactions dominated, and overall market turnover weakened compared to the previous day.

Ningbo: Last Friday, Qilin zinc ingots arrived in the Ningbo market, supplementing market supply. However, traders' quotes still varied significantly. Futures fluctuated at lows, with some downstream enterprises locking in prices and purchasing the previous day. Purchasing willingness was low today, and overall spot premiums remained stable.

Social inventory: On September 5, LME zinc inventory decreased by 700 mt to 54,050 mt, down 1.28%. According to SMM communication, as of last Thursday (September 4), the total SMM zinc ingot inventory across seven regions stood at 148,900 mt, up 4,500 mt from August 28 and 2,600 mt from September 1, indicating an increase in domestic inventory.

Zinc price outlook: Last Friday, the LME zinc contract recorded a bullish candlestick with a long upper shadow, supported by the 10/40 daily average lines below. Affected by the disappointing non-farm payrolls data, the US dollar index continued to decline, providing upward momentum for LME zinc. Last Friday, the SHFE zinc contract recorded a bearish candlestick with a long upper shadow, supported by the lower Bollinger Band. Driven by the LME, SHFE zinc opened higher with a gap. Current downstream consumption remains sluggish, limiting the upward momentum of SHFE zinc. However, low overseas inventory still provides some support for zinc prices. SHFE zinc is expected to remain range-bound in the short term.

Data source statement: Except for 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 not constituting decision-making advice.