LME Zinc Fluctuated at Lows, Awaiting Macro Guidance [SMM Zinc Morning Meeting Minutes]

Zinc Morning Meeting Minutes for September 24

Futures: Overnight, LME zinc opened at $2,902.5/mt, initially touching a high of $2,904.5/mt before fluctuating downward, hitting a low of $2,852/mt and then rebounding above the daily average line, eventually closing down at $2,289.5/mt, a decrease of $10.5/mt or 0.36%, with trading volume dropping to 8,435 lots and open interest increasing by 493 lots to 216,000 lots. Overnight, the most-traded SHFE zinc 2511 contract opened at 21,895 yuan/mt, quickly rising to a high of 21,985 yuan/mt before edging lower and fluctuating around the daily average line, eventually closing up at 21,935 yuan/mt, an increase of 90 yuan/mt or 0.41%, with trading volume decreasing to 49,488 lots and open interest falling by 989 lots to 13.9 lots.

Macro: Powell opens the door for further interest rate cuts? US President Trump: Ukraine, with EU support, is capable of reclaiming all lost territories; Trump cancels meeting with Democrats on temporary funding bill, deeming it unlikely to yield results; Russian media: Russia may extend gasoline export ban, also discussing possibility of diesel export ban; Stablecoin giant Tether seeks to raise up to $20 billion at a $500 billion valuation; National Development and Reform Commission (NDRC): Domestic refined oil product prices remain unchanged on September 23, 2025, as per the mechanism.

Spot Market:

Shanghai: Yesterday, many traders in the Shanghai market were selling, and futures prices fell again. Morning offers were high, but downstream enterprises had largely completed their prior pricing, with purchases mostly for immediate needs. Overall trading was slower than the previous day, with traders facing sluggish sales and limited increases in spot premiums.

Guangdong: Yesterday, the purchasing sentiment for refined zinc in the Guangdong region was 2.38, while the sales sentiment was 2.50. With zinc prices currently in the doldrums, downstream users still engaged in some restocking at lower levels. However, due to low prices, some traders showed a strong reluctance to budge on prices. Additionally, smelters' willingness to sell weakened under the influence of low prices, and premiums and discounts remained unchanged from the previous day.

Tianjin: Yesterday, the purchasing sentiment for refined zinc in the Tianjin region was 2.45, while the sales sentiment was 2.51. At the open, zinc prices continued to decline, and downstream users actively priced some orders, beginning National Day stockpiling. With futures prices too low, smelters and traders were reluctant to sell, leading to a slight increase in traders' selling premiums. Overall market trading was moderate.

Ningbo: As some traders completed their sales, few were selling in the Ningbo market yesterday. Spot offers rose slightly, with some downstream users continuing to stockpile ahead of the National Day holiday, showing active inquiry and purchasing. However, limited availability resulted in sluggish market trading.

Social Inventory: On September 23, LME zinc inventory decreased by 1,050 mt to 45,775 mt, a drop of 2.24%. According to SMM communication, as of September 22, the total zinc ingot inventory across seven regions tracked by SMM was 157,000 mt, down 3,600 mt from September 15 and 1,500 mt from September 18, indicating a decrease in domestic inventory.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a bearish candlestick, with the 5-day daily average forming resistance overhead. The US dollar index maintained a fluctuating trend. On the macro front, the US Fed has not provided further clear guidance on interest rate cuts. However, LME zinc inventory continued to decline, and low inventory supported a low-level recovery in LME zinc. Overnight, SHFE zinc recorded a bullish candlestick, with the lower Bollinger Band providing support. Affected by the typhoon, some downstream zinc alloy plants in Guangdong have temporarily halted production recently, leading to sluggish consumption performance. Zinc prices still face overhead pressure, and SHFE zinc remains in the doldrums.

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, for reference only and not constituting decision-making advice.