US Unemployment Rate Rises to Four-Year High, LME Zinc Center Shifts Upward [SMM Morning Meeting Minutes]

SMM Zinc Morning Meeting Minutes for November 21
Futures: Overnight, LME zinc opened at $2,996/mt. It fluctuated around the daily average initially, then dipped to $2,978.5/mt during European trading hours. Subsequently, bulls increased their positions, pushing LME zinc to fluctuate upward and touch a high of $3,036.5/mt during the night session, finally closing up at $3,003.5/mt, an increase of $13.5/mt, or 0.45%. Trading volume increased to 11,620 lots, and open interest rose by 2,373 lots to 221,000 lots. Overnight, the most-traded SHFE zinc 2601 contract opened at 22,490 yuan/mt. It briefly dipped to a low of 22,470 yuan/mt early in the session before bulls increased positions, driving the contract up to touch a high of 22,600 yuan/mt. The price center then moved down near the daily average, finally closing up at 22,525 yuan/mt, an increase of 140 yuan/mt, or 0.63%. Trading volume decreased to 45,746 lots, while open interest increased by 741 lots to 89,603 lots.
Macro:
September non-farm payrolls unexpectedly surged significantly, while the unemployment rate rose to a four-year high; several US Fed officials expressed unease about further interest rate cuts; Zelenskyy has received a US draft peace plan; Japanese government advisor: Intervention could be triggered before the yen falls to 160; industry association suggests setting a cost baseline for LFP to standardize pricing.
Shanghai: Yesterday, the refined zinc purchase sentiment in Shanghai was 2.42, and the sales sentiment was 2.53. Zinc futures prices maintained a fluctuating trend. Spot premiums in the Shanghai market saw a slight decline WoW as trader offerings increased. However, low-priced zinc ingots for plant pick-up continued to flow into the east China market, while some downstream users showed low purchase willingness for zinc ingots in Shanghai warehouses. Overall transaction volume did not show significant improvement yesterday.
Guangdong: Yesterday, the refined zinc purchase sentiment in Guangdong was 2.35, and the sales sentiment was 2.40. Overall, zinc prices continued to fluctuate at highs. Trader quotations were basically flat compared to the previous day, while downstream users maintained just-in-time procurement. Trading volume in the spot market showed no significant change. The price spread between futures contracts narrowed slightly, and spot premiums/discounts edged higher.
Tianjin: Yesterday, the refined zinc purchase sentiment in Tianjin was 2.30, and the sales sentiment was 2.41. Zinc prices fluctuated yesterday. Downstream consumption was relatively average, and as most enterprises had priced and picked up goods extensively at the start of the week, some smaller plants primarily engaged in just-in-time restocking. Trader quotations generally held steady, and overall market trading was sluggish.
Ningbo: Most traders engaged in pre-sales yesterday, and spot zinc ingot availability remained scarce. Overall spot premiums continued to fluctuate at highs. Downstream enterprises purchased as needed, and spot trading performance was stable.
Social Inventory: On November 20, LME zinc inventory increased by 1,000 mt, or 2.22%, to 46,075 mt. According to SMM communication, as of this Thursday (November 20), the total zinc ingot inventory across seven SMM-tracked locations was 152,700 mt, down 5,200 mt from November 13 and down 3,900 mt from November 17, indicating a decrease in domestic inventory.
Zinc Price Forecast: Overnight, the LME zinc contract recorded a small bullish candlestick, breaking above the 5- and 10-day daily averages. US non-farm payrolls unexpectedly surged, but the unemployment rate hit a four-year high, making expectations for US Fed interest rate cuts increasingly complex. Funds entered the market, lifting the LME zinc price center. LME zinc is expected to mainly fluctuate at highs today. Overnight, the SHFE zinc contract recorded a small bullish candlestick, testing the 5- and 10-day daily averages. Domestic inventory decreased, and consumption remained resilient. Zinc ingot exports in October reached 8,500 mt, with further export expectations for November. The SHFE zinc price center moved higher. 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.