LME Continues to Ship to Delivery Warehouse, LME Zinc Maintains Volatile Trading [SMM Morning Meeting Minutes]

SMM November 20 Zinc Morning Meeting Minutes
Futures: Overnight, LME zinc opened at $2,989/mt. It fluctuated around the daily average line initially, then rose rapidly as bears reduced positions, hitting a high of $3,019/mt. Subsequently, bulls cut positions, and LME zinc fluctuated downward, touching a low of $2,975.5/mt before closing down at $2,990/mt, down $0.5/mt or 0.02%. Trading volume fell to 9,480 lots, and open interest dropped by 2,315 lots to 218,000 lots. Overnight, the most-traded SHFE zinc 2601 contract opened at 22,495 yuan/mt. It rose quickly initially, reaching a high of 22,500 yuan/mt, then fluctuated downward as bulls reduced positions and upward momentum weakened, touching a low of 22,385 yuan/mt before closing down at 22,405 yuan/mt, down 30 yuan/mt or 0.13%. Trading volume decreased to 21,031 lots, while open interest increased by 1,633 lots to 88,513 lots.
Macro:
The US and Russia reportedly secretly drafted a 28-point peace talk framework; the US Fed will lack the latest non-farm payrolls data for reference at its December meeting; the October Fed meeting minutes showed serious divergence among officials; the Trump administration is said to consider suspending semiconductor tariffs; Nvidia's AI revenue and outlook both exceeded expectations; the Netherlands announced a suspension of the administrative order against Nexperia.
Shanghai: Yesterday, the refined zinc procurement sentiment in Shanghai was 2.45, and the sales sentiment was 2.47. More traders offered goods, and the premium to the average price dropped back slightly, but futures also strengthened MoM. Downstream enterprises had made some just-in-time procurement and priced earlier, and wait-and-see sentiment resurfaced yesterday, leading to mediocre overall spot market transactions.
Guangdong: Yesterday, the refined zinc procurement sentiment in Guangdong was 2.34, and the sales sentiment was 2.38. Overall, zinc prices edged up slightly, downstream enterprises maintained just-in-time procurement, and spot market transactions were relatively mediocre. Although some traders quoted high premiums and discounts, actual transactions were difficult.
Tianjin: Yesterday, the refined zinc procurement sentiment in Tianjin was 2.31, and the sales sentiment was 2.44. Zinc prices rose slightly yesterday. Downstream enterprises had priced and picked up more goods in the previous two days; with zinc prices rising yesterday, the market was mediocre, while traders held prices firm and continued to raise offers, leading to a slight increase in premiums. Overall market transactions weakened compared to the previous day.
Ningbo: Some long-term contract zinc ingots arrived in Ningbo, but the volume was limited. Spot goods remained scarce in Ningbo yesterday, traders continued to hold prices firm, and spot premiums rose MoM. Some downstream enterprises had low raw material levels, and spot transactions performed quickly.
Social inventory: On November 19, LME zinc inventory increased by 1,550 mt or 3.56% to 45,075 mt. According to SMM communication, as of this Monday (November 17), the total zinc ingot inventory in seven SMM regions was 156,600 mt, down 1,300 mt from November 13, indicating a decrease in domestic inventory.
Zinc Price Forecast: Overnight, LME zinc recorded a small bullish candlestick. Boosted by risk aversion and expectations that the US Fed may keep interest rates unchanged in December, the US dollar index strengthened for the fourth consecutive trading day. Additionally, with LME zinc being shipped to delivery warehouses intermittently, bottom support weakened somewhat, and LME zinc traded within a range. LME zinc is expected to trade mainly within a range today. Overnight, SHFE zinc recorded a small bearish candlestick. Expectations for US Fed interest rate cuts weakened, macro sentiment softened, and consumption still showed no bright spots, leading to a decline in SHFE zinc. SHFE zinc is expected to trade mainly within a range 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, for reference only and do not constitute decision-making advice.