LME Zinc Fluctuated Upward, Focus on Subsequent Macro Performance [SMM Zinc Morning Meeting Minutes]

October 30 Zinc Morning Meeting Summary

Futures: Overnight, LME zinc opened at $3,051/mt. Initially, LME zinc fluctuated briefly along the daily average line, touching a low of $3,050/mt, then rose continuously, reaching a high of $3,094.5/mt. LME zinc then fluctuated above the daily average line. Near the end of the session, LME zinc turned to a downward trend, closing at $3,070/mt, up $13.5/mt, with a 0.44% increase. Trading volume decreased to 10,629 lots, and open interest fell by 1,275 lots to 221,000 lots. Overnight, the most-traded SHFE zinc 2512 contract opened higher with a gap at 22,490 yuan/mt. During the night session, SHFE zinc fluctuated around the daily average line, reaching a high of 22,530 yuan/mt at the beginning of the session. Near the end of the session, SHFE zinc touched a low of 22,435 yuan/mt, closing at 22,455 yuan/mt, up 25 yuan/mt, with a 0.11% increase. Trading volume decreased to 47,030 lots, and open interest increased by 1,081 lots to 120,000 lots.

Macro: The US Fed cut interest rate by 25BP as expected, with Powell stating that a December rate cut is not set in stone; Trump: Failed to coordinate a meeting time with Kim Jong-un; The US announced new sanctions on Russia, targeting two oil companies; South Korea and the US reached a trade agreement, with South Korea to invest $350 billion in the US; The Bank of Canada cut interest rate by 25 basis points as expected, while hinting at a pause in rate cuts to defend the economy and control inflation; Nvidia became the first company to reach a market value of $5 trillion; Xi Jinping will meet with US President Trump in Busan, South Korea, on October 30 local time; A special fund for the development of strategic emerging industries by central state-owned enterprises was launched, with an initial size of 51 billion yuan.

Spot Market:

Shanghai: In the Shanghai area, the refined zinc purchasing sentiment was 2.20, and the selling sentiment was 2.55 yesterday. Futures zinc prices maintained a fluctuating trend. The spot premiums were basically stable compared to the previous day. Downstream buyers remained cautious due to high prices, and the willingness to purchase spot goods was moderate. Spot market transactions were mediocre, with more trading among traders.

Guangdong: In the Guangdong area, the refined zinc purchasing sentiment was 1.96, and the selling sentiment was 2.45. Overall, zinc prices continued to fluctuate. Downstream buyers mainly made just-in-time procurement, and traders' sales were relatively moderate, with quotes basically flat compared to the previous day.

Tianjin: In the Tianjin area, the refined zinc purchasing sentiment was 1.84, and the selling sentiment was 2.31. Zinc prices continued to fluctuate at highs. Downstream buyers were cautious about high prices and mainly restocked based on just-in-time procurement. Traders did not sell much, and overall quotes slightly decreased. The overall market transactions were poor.

Ningbo: In the Ningbo area, spot zinc ingots were still scarce, and traders' quotes were mostly for pre-sales. Some Shanghai zinc ingots continued to flow into the Ningbo market. Downstream enterprises actively inquired and purchased, and spot premiums remained high.

Social Inventory: On October 28, LME zinc inventory decreased by 50 mt to 35,200 mt, down 0.14%. According to SMM communication, as of October 27, the total SMM zinc ingot inventory across seven regions was 163,500 mt, down 1,800 mt from October 20 but up 1,400 mt from October 23, indicating an increase in domestic inventory.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a bullish candlestick, supported by the 5-day daily average line. Low LME zinc inventory continued to boost zinc prices, with LME zinc fluctuating upward. However, US Fed officials tempered expectations for a December interest rate cut, and the US dollar index rose, requiring continued attention to subsequent macro guidance. Overnight, SHFE zinc recorded a bearish candlestick, pressured by the upper Bollinger Band. Boosted by LME zinc's performance, SHFE zinc gapped up to a high level in the night session, and the price center rose. However, the fundamental supply-demand imbalance—strong supply and weak demand—remained unchanged, downstream consumption was weak, and upward pressure on SHFE zinc persisted.

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.