US Initial Jobless Claims Record Largest Drop, LME Zinc Continues Under Pressure [SMM Morning Meeting Minutes]

SMM Zinc Morning Meeting Minutes for September 19
Futures: Overnight, LME zinc opened at $2,948/mt, which was also the day's highest price. Subsequently, bulls reduced their positions, and LME zinc fluctuated downward throughout the night session, hitting a low of $2,904.5/mt. It finally closed down at $2,913/mt, a decrease of $30/mt or 1.02%. Trading volume dropped to 11,400 lots, and open interest fell by 2,995 lots to 213,000 lots. Overnight, the most-traded SHFE zinc 2511 contract opened at 22,045 yuan/mt. At the beginning of the session, bulls increased their positions, and SHFE zinc fluctuated considerably around the daily average line, with fluctuations of less than 100 yuan. It eventually closed up at 22,060 yuan/mt, an increase of 15 yuan/mt or 0.07%. Trading volume decreased to 41,415 lots, and open interest rose by 5,157 lots to 115,000 lots.
Macro:
A major error occurred in US continuing jobless claims data, with one state's figures underestimated by nearly 20,000 people; the Bank of England held rates steady, and Governor Bailey still believes interest rate cuts will continue; Trump: "If we bring oil prices down, the Russia-Ukraine conflict will end"; Trump opposes UK recognition of a Palestinian state; Nvidia invested $5 billion in Intel and reached a chip cooperation agreement; Minister of Science and Technology: During the "16th Five-Year Plan" period, original and pioneering technological breakthroughs will be strengthened; Media: Hog capacity control exceeded expectations, with top-tier enterprises explicitly required to take the lead in cutting production; Hong Kong police: All stolen gold worth HKD 50 million has been recovered.
Shanghai: Yesterday, the refined zinc purchase sentiment in the Shanghai area was 2.45, and the sales sentiment was 2.9. Futures fell significantly. Downstream enterprises continuously placed limit orders for pricing starting the previous night, but actual purchases did not show a significant increase yesterday. Traders showed strong reluctance to budge on prices in the morning session, but downstream purchases remained limited to rigid demand. Spot offers saw limited increases, and overall trading was mainly among traders.
Guangdong: Yesterday, the refined zinc purchase sentiment in the Guangdong area was 2.16, and the sales sentiment was 2.47. The futures center pulled back yesterday, leading to increased pricing purchases by downstream users. Traders' sales improved, and spot premiums/discounts rose slightly.
Tianjin: Yesterday, the refined zinc purchase sentiment in the Tianjin area was 2.23, and the sales sentiment was 2.71. Zinc prices fell sharply yesterday. Some downstream users conducted pricing purchases at low levels for restocking, but while pricing was frequent, cargo pick-up was limited. Traders' sales premiums increased slightly, and trading among traders was active. Overall market turnover improved compared to the previous day.
Ningbo: Qilin zinc ingots arrived in Ningbo. Yesterday, market traders actively offered and sold goods. Although futures fell, downstream users mostly priced, but actual purchase sentiment was not high. Spot offers remained stable.
Social Inventory: On September 18, LME zinc inventory decreased by 150 mt or 0.31% to 48,825 mt. According to SMM communication, as of last Thursday (September 18), the total zinc ingot inventory in seven SMM regions was 158,500 mt, an increase of 4,300 mt from September 11 and a decrease of 2,100 mt from September 15. Domestic inventory increased.
Zinc Price Forecast: Overnight, LME zinc recorded a bearish candlestick with no upper shadow. The US initial jobless claims showed the largest decline in nearly four years, and the market still expects further interest rate cuts. Non-ferrous metals remained under pressure, with some funds taking profits. However, LME zinc inventory remained relatively tight, providing some support. LME zinc is expected to trade within a range today. Overnight, SHFE zinc recorded a bullish candlestick with a long upper shadow. Macro sentiment remained bearish, but domestic inventory experienced slight destocking, providing some support for SHFE zinc. The expectation of a domestic surplus persists, and attention should be paid to the opening of the export window. SHFE zinc is expected to trade mainly within a range 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.