Expectations for US Fed Interest Rate Cut Continue to Weaken, LME Zinc Center Shifts Downward [SMM Morning Meeting Minutes]

SMM November 18 Zinc Morning Meeting Minutes

Futures: Overnight, LME zinc opened at $3,011/mt. It fluctuated along the daily average line initially, briefly rose during the night session to a high of $3,038/mt, then pulled back as bulls reduced positions, fluctuating downward to a low of $2,987/mt, and finally closed down at $2,989.5/mt, down $25/mt or 0.83%. Trading volume fell to 11,149 lots, and open interest decreased by 3,059 lots to 224,000 lots. Overnight, the most-traded SHFE zinc 2512 contract opened at 22,460 yuan/mt, briefly touched a high of 22,465 yuan/mt initially, then fell as bulls reduced positions, dropping to a low of 22,370 yuan/mt, and finally closed down at 22,390 yuan/mt, down 75 yuan/mt or 0.33%. Trading volume decreased to 35,712 lots, and open interest fell by 1,807 lots to 89,643 lots.

Macro: US Fed Vice Chair Jefferson reiterated the need for cautious policy adjustments; Fed Governor Waller supported a December interest rate cut. European Commission: raised this year's GDP growth forecast from 0.9% to 1.3%. Trump hinted at military action, pressuring Mexico and other Latin American countries. Kremlin: hopes to hold a Putin-Trump summit after completing necessary preparations. Foreign Ministry on G20 meeting: Premier Li Qiang has no arrangement to meet Japanese leaders. Relevant film importers and distributors confirmed: temporarily suspend the release of Japanese imported films.

Shanghai: Yesterday, the refined zinc purchasing sentiment in Shanghai was 2.5, and the selling sentiment was 2.37. Affected by arrivals, Shanghai zinc ingot inventory continued to draw. Shanghai market supply was tight yesterday, traders continued to hold prices firm, spot premiums continued to rise, futures maintained a fluctuating trend, downstream enterprises purchased as needed, and spot trades were mostly among traders.

Guangdong: Yesterday, the refined zinc purchasing sentiment in Guangdong was 2.32, and the selling sentiment was 2.33. Overall, zinc prices maintained a fluctuating trend yesterday, downstream had rigid demand restocking, market transactions improved slightly, driving a slight increase in premiums and discounts.

Tianjin: Yesterday, the refined zinc purchasing sentiment in Tianjin was 2.23, and the selling sentiment was 2.36. Zinc prices pulled back yesterday, some downstream users made point-price restocking at lows, trader offers were relatively few, premiums rose slightly, and overall market transactions were average.

Ningbo: Shortage continued in the Ningbo market yesterday, traders continued to hold prices firm, spot premiums continued to rise, some downstream users actively purchased due to shortage, and overall spot transaction performance was good.

Social Inventory: On November 17, LME zinc inventory increased by 1,000 mt or 2.57% to 39,975 mt. According to SMM communication, as of this Monday (November 17), the total zinc ingot inventory in SMM's seven regions was 156,600 mt, a decrease of 1,300 mt from November 13, indicating a decrease in domestic inventory.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a long upper shadow bearish candlestick. Expectations for a US Fed interest rate cut in December continued to weaken, the US dollar strengthened, and nonferrous metals came under pressure. Additionally, small amounts of LME zinc were shipped to delivery warehouses intermittently, alleviating concerns over low inventory. The center of LME zinc prices shifted downward, and LME zinc was expected to remain in the doldrums today. Overnight, the SHFE zinc contract recorded a bearish candlestick, with the KDJ line opening downward. Macro sentiment gradually weakened, while expectations for smelter production cuts and zinc ingot exports continued to provide bottom support. However, consumption showed no signs of improvement, and SHFE zinc came under pressure. SHFE zinc was expected to remain in the doldrums today.

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.