LME Zinc Ingot Inventory Records a Slight Increase, LME Zinc Fluctuates at Highs [SMM Zinc Morning Meeting Minutes]

Zinc Morning Meeting Minutes for October 27

  Futures: Last Friday, LME zinc opened at $3,023/mt. After opening, it fluctuated along the daily average line, rose to touch a high of $3,040/mt, then quickly pulled back to explore a low of $2,993/mt. Entering the European trading session, LME zinc slightly recovered from the low to near the daily average line, finally closing down at $3,019.5/mt, down $3/mt or 0.1%. Trading volume decreased to 11,522 lots, and open interest increased by 1,629 lots to 224,000 lots. Last Friday, the most-traded SHFE zinc 2512 contract opened at 22,250 yuan/mt. After opening, it fluctuated upward all the way, touching a high of 22,315 yuan/mt during the night session, then pulled back slightly from the high, finally closing down at 22,300 yuan/mt, down 55 yuan/mt or 0.25%. Trading volume decreased to 55,598 lots, and open interest increased by 1,569 lots to 122,000 lots.

Macro: US September CPI readings were all below expectations; White House: may not be able to release inflation data next month; California Governor Newsom admits: considering a run for the 2028 presidential election; Takachiho Kamisaka held first phone talks with Trump; Nikkei: During Trump's visit to Japan, Japan and the US will sign a technology cooperation MOU; Multiple Palestinian factions agree to establish an independent technocratic body to govern the Gaza Strip; Li Chenggang: China and the US constructively formed preliminary consensus on related issues; Domestic GPU producer MetaX's IPO passed the review by the STAR Market listing committee.

Spot Market:

Shanghai: Last Friday, the refined zinc procurement sentiment in Shanghai was 2.21, and the selling sentiment was 2.54. Futures maintained a fluctuating trend, downstream orders were average, spot purchasing remained cautious, inquiries on Friday were still just-in-time procurement, traders mainly sold, with sluggish transactions, spot premiums were in the doldrums.

Guangdong: Last Friday, the refined zinc procurement sentiment in Guangdong was 2.01, and the sales sentiment was 2.29. Overall, zinc prices rose MoM, market trading was sluggish, downstream mainly made just-in-time procurement, wait-and-see sentiment was relatively strong, but traders had low willingness to sell at low prices, spot premiums and discounts were flat compared to last Thursday.

Tianjin: Last Friday, the refined zinc procurement sentiment in Tianjin was 1.93, and the selling sentiment was 2.41. Zinc prices continued to rise, downstream was cautious about high prices and purchased carefully, some made just-in-time restocking, mainly consuming inventory, last Friday was the last day for long-term contracts, many traders settled month-end accounts, few selling offers were available, overall offers held slightly steady, overall market transactions were poor.

Ningbo: Last Friday, the market still had almost no spot offers, zinc ingots were mostly expected to arrive this week, traders had many pre-sale offers, some downstream actively inquired, but limited by cargo volume, zinc ingot transactions were basically for pre-sold goods.

Social Inventory: On October 24, LME zinc inventory increased by 2,900 mt to 37,600 mt, up 8.36%. According to SMM communication, as of October 23, the total zinc ingot inventory in seven SMM-tracked regions stood at 162,100 mt, down 600 mt from October 16 and 3,200 mt from October 20, indicating a decline in domestic inventory.

Zinc Price Forecast: Last Friday, LME zinc recorded a bearish candlestick, with support from the 20-day daily average line. US September CPI data came in lower than expected, reinforcing market expectations for an interest rate cut. However, LME inventory saw a slight accumulation, limiting the upward momentum of LME zinc prices, which continued to hover at highs. Last Friday, SHFE zinc recorded a bullish candlestick, with the KDJ gap narrowing. The zinc ingot export window has remained open recently, with some zinc ingots already exported and some enterprises still having export intentions, supporting SHFE zinc prices to hold up well. However, considering the generally moderate consumption fundamentals, the upside for SHFE zinc may be limited.

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 intended as decision-making advice.