Bulls reduced positions and exited the market, LME zinc recorded three consecutive negative closes [SMM Morning Meeting Minutes]

Zinc Morning Meeting Minutes for November 7

Futures: Overnight, LME zinc opened at $3,052.5/mt. At the beginning of the session, it briefly dipped to $3,040.5/mt before its center moved above the daily average line. Approaching the night session, it touched a high of $3,476/mt. Toward the end of the session, bulls reduced positions and exited, causing LME zinc's center to move down and consolidate around $3,050/mt. It finally closed down at $3,051/mt, falling by $3.5/mt, a decrease of 0.11%. Trading volume decreased to 9,702 lots, and open interest decreased by 3,057 lots to 226,000 lots. Overnight, the most-traded SHFE zinc 2512 contract opened at 22,725 yuan/mt. After briefly touching a high early in the session, bulls reduced positions and exited, leading to a fluctuating downward trend throughout, with its center operating below the daily average line. It finally closed up at 22,630 yuan/mt, rising by 35 yuan/mt, an increase of 0.15%. Trading volume decreased to 41,025 lots, and open interest decreased by 28 lots to 113,000 lots.

Macro: Chicago Fed data: The October unemployment rate was approximately 4.36%, hitting a four-year high; US Fed officials remained cautious; Trump: No new tariffs will be announced while the Supreme Court hears the tariff case; US media: The Trump administration currently has no plans to take action against Venezuela and lacks the legal basis to do so; U.S. Geological Survey (USGS) released the 2025 updated list of critical minerals, including copper, silver, and potash fertilizer; Chinese President Xi Jinping: Develop the Hainan Free Trade Port to high standards and promote the optimization and upgrading of leading industries.

Spot Market:

Shanghai: The purchasing sentiment for refined zinc in the Shanghai area was 2.43, while the selling sentiment was 2.40. Recent zinc ingot arrivals in Shanghai have decreased, coupled with ongoing zinc ingot exports, leading to continued destocking of Shanghai zinc ingot inventory. Few traders were selling today, and with tight supply, spot premiums continued to hold firm. However, downstream buyers remained cautious in their purchases, mostly purchasing low-priced zinc ingots delivered from plants. Today's market activity was still predominantly among traders.

Guangdong: The purchasing sentiment for #0 zinc in the Guangdong area was 1.95, while the sales sentiment was 2.45. Overall, zinc prices maintained a fluctuating trend today. Some downstream users had already made small purchases yesterday. The overall market transaction volume was relatively light during the morning session, improving slightly for some traders in the second session. However, overall, traders had a low willingness to sell at low prices. Premiums and discounts in the market held steady today.

Tianjin: The purchasing sentiment for refined zinc in the Tianjin area was 1.75, while the selling sentiment was 2.46. Zinc prices fluctuated today. Affected by environmental protection-driven production restrictions, downstream demand was weak. Downstream users restocked only for essential needs, with minimal purchasing. Trader quotations were chaotic, and the price spread between brands widened. Trading was mainly among traders, and overall market transactions weakened compared to yesterday.

Ningbo: Previously arrived zinc ingots were continuously being digested, and spot market tightness persisted. Zinc ingot traders were scarce in the market today, and spot premiums continued to rise. Downstream enterprises purchased according to demand, and overall transactions were relatively swift.

Social Inventory: On November 6, LME zinc inventory increased by 100 mt to 34,100 mt, up 0.29%. According to SMM communication, as of November 6, the total zinc ingot inventory in seven SMM regions was 158,700 mt, down 2,700 mt from October 30 and 3,000 mt from November 3, indicating a decrease in domestic inventory.

Zinc Price Forecast: LME zinc recorded three consecutive declines overnight, with the center of the daily candlestick moving downward and support provided by the middle Bollinger Band. Overnight, US Fed officials expressed cautious remarks, stating that sustained interest rate cuts require further assessment. Combined with increased expectations of shipments to LME delivery warehouses, bulls reduced positions and exited, putting LME zinc under pressure. Overnight, SHFE zinc stopped rising and started to fall, encountering resistance at the upper Bollinger Band. Supported by export expectations, SMM social inventory decreased again, and with TC still expected to decline, supply-side support remains strong, keeping SHFE zinc fluctuating at highs.

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.