The US dollar index continued to strengthen, and the center of LME zinc pulled back [SMM Morning Meeting Minutes]

Futures: Overnight, LME zinc opened at $3,043/mt. After opening, it immediately touched a high of $3,047.5/mt, then fluctuated downward below the daily average line. By the end of the session, it hit a low of $2,993.5/mt and finally closed down at $2,995/mt, falling $46.5/mt, a decline of 1.53%. Trading volume increased to 118,000 lots, and open interest increased to 224,000 lots. Overnight, SHFE zinc was closed due to the holiday.

Macro: Trump announced the signing of the first phase of a Gaza ceasefire agreement between Israel and Hamas; the US Senate rejected the bipartisan temporary funding bill for the sixth time; generic drugs will be excluded from the large pharmaceutical companies' tariff plan; the September Fed meeting minutes cautiously hinted at further interest rate cuts this year; the EU believes new US requirements may weaken the previous EU-US trade agreement; Macron is expected to appoint a new prime minister within 48 hours.

Spot Market:

Shanghai: The buying sentiment for refined zinc in the Shanghai area was 1.95, and the selling sentiment was 2.06. It was the last trading day before the National Day holiday. Most suppliers were on break, and downstream stockpiling was largely completed. Almost no purchasing sentiment was observed last Tuesday. Overall market trading was sluggish, and spot premiums maintained a fluctuating trend.

Guangdong: The buying sentiment for refined zinc in the Guangdong area was 1.98, and the selling sentiment was 2.12. With the National Day and Mid-Autumn Festival holidays approaching, downstream enterprises had basically completed stockpiling and were about to enter the holiday period. The number of traders selling also decreased. Market trading was sluggish, and spot premiums/discounts were flat compared to the previous day.

Tianjin: The buying sentiment for refined zinc in the Tianjin area was 2.34, and the selling sentiment was 2.13. Last Tuesday, zinc prices rebounded. On the final day before the holiday, downstream stockpiling was essentially finished, with almost no inquiries. Some traders had already entered holiday mode. Market supply was limited, trader quotes were chaotic, and overall market transactions were poor.

Ningbo: With the National Day holiday approaching, market supply was scarce. Traders were relatively indifferent, quoting high premiums. However, downstream enterprises had completed stockpiling and stopped purchasing. No spot transactions were heard in the market last Tuesday.

Social Inventory: On October 8, LME zinc inventory increased by 50 mt to 38,250 mt, up 0.13%. According to SMM communication, as of September 29, the total zinc ingot inventory in seven regions tracked by SMM was 141,400 mt, decreasing by 15,600 mt compared to September 22 and by 9,000 mt compared to September 25. Domestic inventory decreased.

Zinc Price Forecast: Overnight, LME zinc recorded a large bearish candlestick, with the upper Bollinger Band providing resistance. Trump's announcement of the signing of the first phase of the Gaza ceasefire agreement between Israel and Hamas improved macro sentiment and weakened risk aversion. However, the continuously strengthening US dollar index exerted some pressure on zinc prices, leading to a decline in LME zinc. Overnight, SHFE zinc was closed due to the domestic holiday.

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