US Dollar Index Maintains Fluctuating Trend, LME Zinc Records a Small Bullish Candlestick [SMM Morning Meeting Minutes]

Futures: Overnight, LME zinc opened at $3,060/mt. At the beginning of the session, LME zinc fluctuated considerably around the daily average line. During the night session, it dipped to $3,044/mt, but then recovered losses and rose to a high of $3,078.5/mt before closing at $3,072/mt, up $3/mt or 0.10%. Trading volume increased to 147,000 lots, and open interest rose by 946 lots to 221,000 lots. Overnight, the most-traded SHFE zinc 2512 contract opened at 22,630 yuan/mt. Initially, it dipped slightly to 22,550 yuan/mt, then fluctuated upward driven by short covering, reaching a high of 22,700 yuan/mt. It maintained a relatively strong fluctuating trend towards the close, ending at 22,685 yuan/mt, up 5 yuan/mt or 0.02%. Trading volume decreased to 51,762 lots, and open interest fell by 1,219 lots to 105,000 lots.

Macro: The House of Representatives will hold a full vote on the bill to end the government shutdown at 8:00 Beijing time on the 13th; White House: October non-farm payrolls and inflation data may never be released; Atlanta Fed President Bostic unexpectedly announced his retirement; Four regional Fed presidents with voting rights are not enthusiastic about another interest rate cut in December; Ukrainian Foreign Ministry: Peace talks with Russia will not take place at least until the end of the year; China will continue to extend the visa-free policy for Spain to facilitate personnel exchanges; National Energy Administration issued guidance on promoting the integrated development of new energy.

Spot:

Shanghai: The refined zinc purchasing sentiment in Shanghai was 2.15, and the selling sentiment was 2.21. There were still few traders in the market yesterday. Futures maintained a fluctuating trend, and spot premiums held steady. However, downstream buyers remained cautious due to high prices, and purchasing was still prudent. Overall spot trading was sluggish.

Guangdong: The refined zinc purchasing sentiment in Guangdong was 2.03, and the selling sentiment was 2.36. Overall, futures maintained a fluctuating trend yesterday, but the number of selling traders increased compared to the previous day. Meanwhile, some traders showed low willingness to sell at low prices. Overall market trading was sluggish, and spot premiums/discounts were flat compared to the previous day.

Tianjin: The refined zinc purchasing sentiment in Tianjin was 1.75, and the selling sentiment was 2.19. Zinc prices pulled back slightly yesterday, but downstream demand was relatively mediocre with only limited inquiries. The market was relatively quiet, and traders offered fewer quotes due to attending external meetings. Prices held steady with minor changes. Overall market trading was sluggish.

Ningbo: There were very few selling traders in the Ningbo market. Spot premium quotes remained high. Futures maintained a fluctuating trend. Downstream enterprises continued to purchase based on demand. Overall spot trading was mediocre.

Inventory: On November 12, LME zinc inventory increased by 575 mt to 35,875 mt, up 1.63%. According to SMM communication, as of November 10, the total zinc ingot inventory in seven SMM regions was 159,600 mt, down 2,100 mt from November 3 but up 900 mt from November 6, indicating a slight increase in domestic inventory.

Zinc Price Forecast: The LME zinc contract recorded a small bullish candlestick overnight, with the 20/60-day daily average providing support below. After the US government resumed operations, a series of economic data will be released. Market participants are continuously assessing the impact of these data on the US Fed's interest rate policy. Amid uncertainty, the US dollar index initially rose before falling, while LME zinc also maintained a fluctuating trend. The SHFE zinc contract recorded a small bullish candlestick overnight, with the 20/60-day daily average providing support below. The export window remains open, providing opportunities for domestic spot zinc cargo to be exported. Coupled with the continuously declining TC and zinc ingot production that is expected to fall below expectations, multiple factors continue to provide some support for the bottom of SHFE zinc. Attention is focused on today's domestic inventory data.

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. They are for reference only and do not constitute decision-making advice.