Anticipation of US Interest Rate Cut Intensifies, LME Zinc Surges Significantly [SMM Morning Meeting Minutes]

SMM September 15 Zinc Morning Meeting Minutes
Futures: Last Friday, LME zinc opened at $2,905.5/mt, initially dipped briefly to a low of $2,900.5/mt, then fluctuated upward as bulls increased positions, reaching a high of $2,960/mt during the night session, and finally closed up at $2,956/mt, up $51/mt, a gain of 1.76%. Trading volume increased to 14,507 lots, and open interest rose by 1,254 lots to 205,000 lots. Last Friday, the most-traded SHFE zinc 2510 contract opened at 22,345 yuan/mt, fluctuated initially, then dipped to a low of 22,260 yuan/mt as bulls reduced positions, and subsequently consolidated near the daily average line, finally closing down at 22,300 yuan/mt, down 5 yuan/mt, a decline of 0.02%. Trading volume decreased to 40,122 lots, and open interest fell by 2,005 lots to 95,692 lots.
Macro:
Trump: When NATO countries stop buying Russian oil, I am prepared to impose major sanctions on Russia; BlackRock executive Rick Rieder becomes a top candidate for Fed Chairman; G7 finance ministers plan to impose sanctions and tariffs on Russia's supporters in the Russia-Ukraine conflict; US Secretary of Energy: EU may phase out Russian natural gas within 6 to 12 months; US and UK to sign a technology agreement focusing on key technologies like AI and quantum computing; Netanyahu hints at continuing to "eliminate" Hamas leadership; China and US hold talks in Spain on economic and trade issues.
Shanghai: Last Friday, the refined zinc purchasing sentiment in Shanghai was 2.35, and the selling sentiment was 2.81. Market traders' spot quotes remained stable, futures maintained a fluctuating trend, downstream purchases were for rigid demand, overall transactions were mainly among traders, and premiums are expected to show no significant improvement next week.
Guangdong: Last Friday, the refined zinc purchasing sentiment in Guangdong was 2, and the selling sentiment was 2.69. Overall, there is ample spot cargo circulating in the Guangdong market, coupled with relatively weak downstream consumption, making it difficult for traders to sell. Recent deliveries increased in the Guangdong market, and spot premiums/discounts continued to decline last Friday amid sluggish transactions.
Tianjin: Last Friday, the refined zinc purchasing sentiment in Tianjin was 1.9, and the selling sentiment was 2.62. Zinc prices rose further last Friday, downstream purchasing enthusiasm was low, overall orders were weak, restocking was mainly for rigid demand, traders slightly lowered premiums to sell, transactions were mainly among traders, and overall market performance was poor.
Ningbo: Market cargo volume was limited, some traders quoted prices passively, spot premiums increased slightly, futures maintained a fluctuating trend, downstream purchases were as needed, and transactions remained average.
Social inventory: On September 12, LME zinc inventory decreased by 100 mt to 50,525 mt, a drop of 0.2%; according to SMM communication, as of last Thursday (September 11), SMM zinc ingot inventory in seven regions totaled 154,200 mt, up 5,200 mt from September 4 and up 2,100 mt from September 8, indicating an increase in domestic inventory.
Zinc Price Forecast: Last Friday, the LME zinc contract recorded a long bullish candlestick, retesting the 5-day daily average, with LME zinc inventory falling to 50,525 mt, and expectations for a US Fed interest rate cut in September continued to heat up. With high fund concentration, LME zinc surged significantly. Last Friday, SHFE zinc recorded a small bearish candlestick. Domestic consumption remains relatively weak, and inventory buildup continues, with the supply surplus pattern unchanged. However, macro sentiment is bullish, and the external market is boosting the domestic market. It is expected that the center of SHFE zinc may continue to rise today.
 

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