LME inventory continues to decrease, LME zinc continues to rise [SMM Morning Meeting Summary]

SMM September 17 Zinc Morning Meeting Minutes

Futures: Overnight, LME zinc opened at $2,982/mt. It initially fluctuated downward slightly, hitting a low of $2,961/mt during European trading hours. Subsequently, bears reduced positions, and LME zinc fluctuated upward throughout the session, reaching a high of $3,003.5/mt before closing. It finally settled at $2,984.5/mt, up $2.5/mt, a gain of 0.08%. Trading volume decreased to 11,350 lots, and open interest fell by 2,659 lots to 216,000 lots. Overnight, the most-traded SHFE zinc 2510 contract opened at 22,330 yuan/mt. Initially, bears reduced positions, and SHFE zinc quickly rose to a high of 22,365 yuan/mt. Subsequently, due to insufficient upward momentum, SHFE zinc fluctuated downward and finally settled at 22,290 yuan/mt, up 35 yuan/mt, a gain of 0.16%. Trading volume decreased to 48,493 lots, and open interest fell by 3,330 lots to 81,661 lots.

Macro: US August retail sales month-on-month exceeded expectations; the Trump administration will appeal the court's ruling on US Fed Governor Cook; the US Department of Commerce is considering imposing additional tariffs on more imported auto parts; Trump and Modi held a phone call seeking to ease tariff and Russian oil disagreements; Netanyahu will visit the White House again at month-end; nine departments including the Ministry of Commerce issued the "Several Policy Measures on Expanding Service Consumption"; China successfully launched a satellite internet technology test satellite.

Shanghai: Yesterday, the purchasing sentiment for refined zinc in the Shanghai area was 2.29, and the selling sentiment was 2.78. Many traders were selling in the market yesterday. Futures maintained a fluctuating trend, and overall spot quotations held steady. Downstream orders were average, purchasing enthusiasm was not high, and trading performance was mediocre. Trades in the Shanghai market were mainly among traders.

Guangdong: Yesterday, the purchasing sentiment for refined zinc in the Guangdong area was 2.12, and the selling sentiment was 2.49. Overall, zinc prices fell yesterday, leading to a slight improvement in downstream purchasing enthusiasm. Sales of delivery brands strengthened, and spot trades in the market improved. Also yesterday, contract rollover quotations in Guangdong shifted from the 2510 contract to the 2511 contract, and spot premiums/discounts rose.

Tianjin: Yesterday, the purchasing sentiment for refined zinc in the Tianjin area was 1.91, and the selling sentiment was 2.63. Zinc prices maintained a fluctuating trend yesterday. There was some restocking when futures fell, but overall purchasing enthusiasm was not high. Traders' sales held steady, with trades mainly among traders. Overall market trading was sluggish.

Ningbo: Traders in the Ningbo market actively sold goods. Spot discounts were flat compared to the previous day. Overall market supply was ample, but downstream enterprises maintained rigid demand. Spot trades remained steady yesterday.

Social inventory: On September 16, LME zinc inventory decreased by 1,175 mt to 48,975 mt, a drop of 2.34%. According to SMM communication, as of this Monday (September 15), the total zinc ingot inventory in seven regions tracked by SMM was 160,600 mt, up 8,500 mt from September 8 and up 6,400 mt from September 11. Domestic inventory increased.

Zinc Price Forecast: Overnight, LME zinc recorded a small bullish candlestick. LME zinc inventory continued to decline, and the market bet on the US Fed cutting interest rates this week, which pressured the US dollar. LME zinc continued to rise, but upside resistance remains. It is expected that LME zinc will mainly fluctuate at highs today. Overnight, SHFE zinc recorded a small bearish candlestick. Domestic peak consumption season did not materialize, and the SHFE/LME zinc price ratio continued to decline. The market is focusing on the opening of the zinc ingot export window. It is expected that SHFE zinc will mainly fluctuate today.

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. They are for reference only and do not constitute decision-making advice.