The US dollar was in the doldrums, and zinc prices rose accordingly [SMM Morning Meeting Minutes]

Zinc Morning Meeting Minutes for September 30

Futures: Overnight, LME zinc opened at $2,888.5/mt. After briefly consolidating around the daily average line at the beginning of the session, it fluctuated upward along the line, with the center shifting near $2,940/mt toward the end, hitting a high of $2,944.5/mt. It finally closed up at $2,937/mt, rising by $50.5/mt, a gain of 1.75%. Open interest remained flat at 219,000 lots, while trading volume increased by 1,997 lots to 10,160 lots. Overnight, the most-traded SHFE zinc 2511 contract opened higher with a gap at 21,890 yuan/mt. During the session, bears reduced their positions, and SHFE zinc generally traded above the daily average line, with the center shifting above 22,000 yuan/mt. It finally closed up at 22,020 yuan/mt, rising by 265 yuan/mt, a gain of 1.22%. Trading volume decreased to 90,562 lots, and open interest fell by 11,035 lots to 131,000 lots.

Macro: US gold reserves exceed $1 trillion; the US Senate will vote again on a bill to avoid a federal government shutdown; the US Bureau of Labor Statistics will suspend operations during a government shutdown, neither collecting nor releasing data; Trump's tariff threats target movies and furniture; Trump announced a 20-point plan to end the Gaza conflict, accepted by Israel and under review by Hamas; China's National Development and Reform Commission (NDRC) will intensify macro policy implementation as appropriate and formulate policy guidelines for new-generation smart terminals and agents; NDRC: the new-type policy financial tools total 500 billion yuan, all for supplementing project capital.

Spot Market:

Shanghai: The purchase sentiment for refined zinc in Shanghai was 2.87, and the sales sentiment was 2.62. Approaching the National Day holiday, some traders were on break, and zinc ingot supply in Shanghai was limited today. As zinc futures fell below 21,700 yuan/mt in the morning, traders' purchase willingness increased, and downstream enterprises actively priced at lows, leading to a significant rise in spot premiums.

Guangdong: The purchase sentiment for refined zinc in Guangdong was 2.47, and the sales sentiment was 2.51. Overall, as zinc prices continued to decline, downstream purchase enthusiasm rebounded, and market trading improved. The higher premiums and discounts quoted by traders at low prices also drove the premiums and discounts upward today.

Tianjin: The purchase sentiment for refined zinc in Tianjin was 2.67, and the sales sentiment was 2.31. Today, zinc prices broke below support to a four-month low. Although downstream users had purchased heavily earlier, they still priced significantly today for post-holiday cargo pick-up, showing high purchase enthusiasm. Smelters were reluctant to sell at low prices, market supply was limited, and traders raised premiums and discounts for sales, resulting in good overall market transactions.

Ningbo: Quoting traders in the Ningbo market remained scarce, and futures fell significantly WoW. Downstream enterprises in Ningbo showed high pricing enthusiasm but had mostly completed stockpiling, leading to limited actual purchase volume. Spot quotes rose significantly.

Social Inventory: On September 29, LME zinc inventory decreased by 825 mt to 41,950 mt, down 1.93%. According to SMM market communication, as of September 29, the total SMM zinc ingot inventory across seven regions was 141,400 mt, down 15,600 mt from September 22 and 9,000 mt from September 25, indicating a decrease in domestic inventory.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a large bullish candlestick, with the KDJ gap expanding upward. Affected by the potential US government shutdown, the US dollar was in the doldrums overnight, nonferrous metals generally rose, and LME zinc followed the trend to rise. Overnight, the SHFE zinc contract recorded a bullish candlestick, with the 20-day daily average forming resistance above and the lower Bollinger Bands providing support below. The strong LME performance boosted zinc prices, coupled with continued destocking in domestic social inventory ahead of the holiday and funds exiting for risk avoidance, leading to an upward shift in the price center.

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.