US Fed's Hawkish Remarks Resurface, LME Zinc Drops Back Slightly [SMM Zinc Morning Meeting Minutes]

Zinc Morning Meeting Minutes for October 31

Futures: Overnight, LME zinc opened at $3,066.5/mt, initially touched a high of $3,074/mt, then fluctuated downward along the daily average after opening, approaching a low of $3,022/mt near the close, before slightly rebounding to near the daily average, finally closing down at $3,044.5/mt, down $25.5/mt, a decrease of 0.83%, with trading volume decreasing to 10,419 lots and open interest increasing by 1,045 lots to 222,000 lots. Overnight, the most-traded SHFE zinc 2512 contract opened at 22,280 yuan/mt, initially touched a low of 22,240 yuan/mt, then maintained a fluctuating upward trend during the session, reaching a high of 22,390 yuan/mt near the close, finally closing up at 22,390 yuan/mt, up 25 yuan/mt, an increase of 0.11%, with trading volume decreasing to 45,774 lots and open interest decreasing by 1,108 lots to 119,000 lots.

Macro: Trump: A deal involving purchasing oil and natural gas from Alaska may be reached; ECB holds rates steady for the third consecutive meeting; Lebanese President orders military to respond to Israeli invasion; World Gold Council: Q3 global gold demand hits record high for a single quarter; Jensen Huang: South Korea and NVIDIA have many announcements to make; Chinese and US heads of state agree to maintain regular contact; Five ministries including the Ministry of Finance jointly issue a notice to improve duty-free shop policies to support consumption.

Spot Market:

Shanghai: Yesterday, the purchasing sentiment for refined zinc in Shanghai was 2.18, and the selling sentiment was 2.48. Market traders continued to sell, with spot premiums remaining stable, but zinc ingot delivery prices were lower, leading downstream enterprises to prefer purchasing at lower prices. Trading for zinc ingots in Shanghai did not improve, with spot purchasing still just-in-time.

Guangdong: Yesterday, the purchasing sentiment for refined zinc in Guangdong was 1.98, and the selling sentiment was 2.47. Overall, zinc prices maintained a fluctuating trend, downstream stocking enthusiasm was low, mostly just-in-time procurement, spot transactions were relatively average, but market traders still showed some reluctance to budge on prices, with spot premiums/discounts slightly rising.

Tianjin: Yesterday, the purchasing sentiment for refined zinc in Tianjin was 1.91, and the selling sentiment was 2.35. Zinc prices continued to fluctuate at highs, with some downstream just-in-time restocking on Thursday, traders' overall quotations remained stable, trading was mainly among traders, overall market transactions were poor.

Ningbo: Zinc ingots from Anning, Jiulong, etc., arrived in Ningbo, spot quotations increased slightly yesterday, but overall supply remained limited, traders maintained high spot premiums, downstream enterprises purchased as needed, overall market trading was limited.

Social Inventory: On October 29, LME zinc inventory decreased by 300 mt to 34,900 mt, a decrease of 0.85%; According to SMM communication, as of October 30, the total zinc ingot inventory in seven SMM regions was 161,500 mt, a decrease of 700 mt compared to October 23, and a decrease of 2,000 mt compared to October 27, indicating a reduction in domestic inventory.

Zinc Price Forecast: Overnight, LME zinc recorded a bearish candlestick, with the upper Bollinger Band forming resistance. Hawkish remarks from US Fed officials boosted the US dollar, prompting market caution toward US Fed interest rate cuts, leading LME zinc to pull back slightly. However, supported by low inventory, the overall decline was limited. Overnight, SHFE zinc recorded a bullish candlestick, with the 20-day daily average providing support. The zinc ingot export window remained open, SMM zinc ingot inventory dropped WoW on Thursday, and zinc concentrate TCs continued to decline. During the night session, SHFE zinc maintained a fluctuating trend, but its center shifted lower.

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.