Weak Employment Fuels Interest Rate Cut Expectations, LME Zinc Center Rises Again [SMM Morning Meeting Minutes]

Futures: Overnight, LME zinc opened at $2,887.50/mt, initially fluctuating around the daily average line, touching a low of $2,876.50/mt. Entering the night session, LME zinc gradually rose to a high of $2,905.50/mt, finally closing up at $2,905.00/mt, up $17.50/mt, a gain of 0.61%. Trading volume increased to 116,000 lots, and open interest rose by 2,333 lots to 204,000 lots. Overnight, the most-traded SHFE zinc 2510 contract opened at 22,250 yuan/mt, initially briefly dipping to 22,180 yuan/mt. However, increased buying by bulls drove SHFE zinc to gradually rise, touching a high of 22,295 yuan/mt, then fluctuating around 22,265 yuan/mt, finally closing up at 22,280 yuan/mt, up 30 yuan/mt, a gain of 0.13%. Trading volume decreased to 41,779 lots, and open interest fell by 476 lots to 99,966 lots. Macro:

Spot: The US August unadjusted CPI annual and monthly rates hit new highs since January; US initial jobless claims surged to a nearly four-year high; The European Central Bank kept its three key interest rates unchanged, viewing December as the next opportunity for an interest rate cut; US media: Besant plans to add one or two more candidates to the US Fed Chairman candidate list; US Commerce Secretary Lutnick: If India stops buying Russian oil, the US and India will reach a trade agreement; The State Council approves the launch of 10 comprehensive pilot reforms for market-based allocation of factors; Cyberspace authorities lawfully investigate and deal with Xiaohongshu platform cases damaging the online ecosystem; Foreign media: Baidu and Alibaba are using self-developed chips to train AI models.

Shanghai: Yesterday, the refined zinc procurement sentiment in the Shanghai area was 2.43, and the sales sentiment was 2.83. Futures maintained a fluctuating trend; yesterday, Shanghai market traders focused on selling. Spot offers were basically stable in the morning session, while downstream enterprises in east China procured cautiously, maintaining just-in-time procurement. Overall trading showed mediocre performance, with no improvement compared to the previous day.

Guangdong: Yesterday, the refined zinc procurement sentiment in the Guangdong area was 2.04, and the sales sentiment was 2.82. Overall, yesterday, the zinc price center rose, reigniting downstream wait-and-see sentiment. Although market traders quoted relatively high premiums, they continuously lowered premiums amid difficult transactions; yesterday, spot premiums/discounts continued to decline.

Tianjin: Yesterday, the refined zinc procurement sentiment in the Tianjin area was 1.93, and the sales sentiment was 2.65. Yesterday, zinc prices rebounded slightly; downstream buyers were cautious of high prices and procured carefully. Coupled with generally weak orders, restocking was mainly for immediate needs. Traders slightly lowered premiums for sales; some traders awaited delivery. Overall market transactions were poor.

Ningbo: Futures maintained a fluctuating trend; yesterday, Ningbo traders mostly quoted passively. Overall spot premiums were basically stable; downstream enterprises made just-in-time procurement, and spot transactions operated steadily.

Social Inventory: On September 11, LME zinc inventory decreased by 200 mt to 50,625 mt, a decline of 0.39%. According to SMM communication and understanding, as of this Thursday (September 11), the total SMM zinc ingot inventory across seven regions was 154,200 mt, an increase of 5,200 mt compared to September 4 and an increase of 2,100 mt compared to September 8, indicating a rise in domestic inventory.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a bullish candlestick, with the lower 10/60 daily averages providing support. The number of initial jobless claims in the US surged to a four-year high, and the weakness in the job market reinforced expectations for a US Fed interest rate cut, driving the center of LME zinc prices upward. Overnight, SHFE zinc recorded a bullish candlestick, with the lower Bollinger Band providing support. According to yesterday's SMM inventory data, domestic inventory continued to increase to 154,200 mt. Current downstream consumption is "lackluster during the peak season," yet the decrease in overseas inventories provides some support to zinc prices. SHFE zinc is expected to continue fluctuating at low levels in the short term.

Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, and are for reference only, not constituting decision-making advice.