Expectations of an Interest Rate Cut in September Strengthen, Center of LME Zinc Daily Candlestick Rises [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc opened at $2,862.5/mt. In early trading, the center of LME zinc prices rose to a high of $2,889/mt. During European trading hours, bears increased positions, pushing LME zinc down to a low of $2,856/mt. In the night session, LME zinc partially recovered its losses, rising above the daily average line, and finally closed at $2,873/mt, up $15.5/mt (0.54%). Trading volume increased to 95,398 lots, while open interest rose by 1,742 lots to 201,000 lots. Overnight, the most-traded SHFE zinc 2510 contract opened at 22,245 yuan/mt. In early trading, SHFE zinc dipped to a low of 22,180 yuan/mt. Subsequently, as bears reduced positions, SHFE zinc rose above the daily average line to a high of 22,260 yuan/mt. It maintained a fluctuating trend toward the end of the session and finally closed at 22,245 yuan/mt, down 25 yuan/mt (0.11%). Trading volume decreased to 36,944 lots, while open interest dropped by 663 lots to 105,000 lots.

Macro: The US Senate is expected to advance Milan's US Fed governor nomination on Wednesday; French Prime Minister Beru failed to pass a confidence vote and will submit his resignation; The EU plans to introduce the 19th round of sanctions against Russia, targeting banks and oil trade; OPEC+ received updated oil compensation plans from member countries; The People's Bank of China renewed bilateral currency swap agreements with the European Central Bank, Swiss National Bank, and Hungarian National Bank; Unitree Robotics denied reports of a 50 billion yuan IPO valuation; SMIC: Plans to issue shares to acquire 49% equity in SMIC Northern; MIIT granted China Unicom a satellite mobile communication business license.

Spot:

Shanghai: Yesterday, the purchase willingness for refined zinc in Shanghai was 2.42, while the sales willingness was 2.85. Many traders in the Shanghai market were selling, and futures prices rose slightly WoW. Downstream orders showed no improvement, with raw material purchases remaining rigid. Overall spot quotations remained stable, and trading performance was moderate.

Guangdong: Yesterday, the purchase willingness for refined zinc in Guangdong was 2.08, while the sales willingness was 2.81. Futures prices rose compared to the previous trading day, and some downstream buyers had already made purchases at lower prices last week. Market activity was sluggish, with traders slightly lowering premiums/discounts to facilitate sales, leading to a decline in spot premiums/discounts.

Tianjin: Yesterday, the purchase willingness for refined zinc in Tianjin was 2.13, while the sales willingness was 2.62. Zinc prices rebounded slightly, but downstream buyers had already made significant purchases through fixed pricing earlier, resulting in weak overall purchase willingness. Downstream demand remained weak, with traders slightly lowering premiums to sell. Trading was mainly among traders, with some preparing to transfer to delivery warehouses. Overall market performance was poor.

Ningbo: Zinc ingots arrived in the Ningbo market over the weekend. Many traders were selling yesterday, but overall premiums struggled to rise. Downstream orders showed no improvement, and futures prices rose slightly. Enterprises' purchase willingness remained low, maintaining rigid demand.

Social inventory: On September 8, LME zinc inventory decreased by 975 mt to 53,075 mt, down 1.80%. According to SMM communication, as of Monday (September 8), the total zinc ingot inventory across seven SMM-monitored regions reached 152,100 mt, up 5,800 mt from September 1 and 3,200 mt from September 4, indicating rising domestic inventories.

Zinc price forecast: LME zinc recorded a bullish candlestick overnight, supported by the 10/60 daily average lines. The US dollar index continued to decline amid last week's weak employment data, coupled with growing market expectations for a September interest rate cut and continuous reduction in overseas inventories, pushing the LME zinc price center upward. SHFE zinc formed a long-lower-shadow doji overnight, finding support at the lower Bollinger Band. SMM data showed that as of Monday (September 8), zinc ingot inventories across seven regions rose further to 152,100 mt. While downstream consumption hasn't shown clear peak-season characteristics, low overseas inventories still provide bottom support. SHFE zinc is expected to maintain fluctuating trend in the short term.

Data source statement: Except for publicly available information, other data are derived from public sources, market exchanges, and SMM's internal database models, processed by SMM for reference only and not constituting decision-making advice.