Fed meeting gradually approaches LME zinc center slightly rises [SMM Morning Meeting Minutes]

Futures: Overnight, LME zinc opened at $3,095/mt. At the start of the session, LME zinc rose above the daily average, fluctuating widely during the session. Entering the night session, it pulled back and probed a low of $3,090.5/mt. Towards the end of the session, it quickly rebounded, reaching a high of $3,133.5/mt, and finally closed up at $3,130.5/mt, an increase of $32/mt or 1.03%. Trading volume increased to 128,000 lots, while open interest decreased by 2,099 lots to 220,000 lots. Overnight, the most-traded SHFE zinc 2601 contract opened at 23,250 yuan/mt. After touching a high of 23,255 yuan/mt, it pulled back. Subsequently, in a tug-of-war between longs and shorts, the bears gained the upper hand, pushing SHFE zinc down to a low of 23,095 yuan/mt. Towards the end of the session, as the bears reduced their positions, SHFE zinc slightly recovered, closing down at 23,170 yuan/mt, a decrease of 115 yuan/mt or 0.49%. Trading volume fell to 57,277 lots, and open interest decreased by 2,932 lots to 106,000 lots.

Macro: Trump: A single-rule executive order on artificial intelligence will be issued this week; Russian Deputy Prime Minister: Gold bar exports will be restricted starting from 2026; A 7.5 magnitude earthquake struck off the coast of eastern Honshu, Japan, prompting a tsunami warning; Cambodia and Thailand exchanged fire for two consecutive days along their border, with both sides blaming each other; Paramount offered to acquire Warner Bros. Discovery at $30 per share; The Political Bureau of the CPC Central Committee held a meeting on December 8 to analyze and study economic work for 2026; SHFE issued a notice on strengthening risk control in the precious metals market.

Spot:

Shanghai: In Shanghai yesterday, the purchasing sentiment for refined zinc was 2.23, and the selling sentiment was 2.53. With futures zinc prices hovering around 23,000 yuan/mt, downstream enterprises remained cautious and continued to observe, showing little interest in spot inquiries and purchases. However, there was more trading among traders, and although the overall average price pulled back, the decline was limited, and premiums still fluctuated at highs.

Guangdong: In Guangdong yesterday, the purchasing sentiment for refined zinc was 1.96, and the selling sentiment was 2.41. Overall, zinc prices continued to fluctuate at highs. End-users mostly purchased as needed, but recent destocking in Guangdong led to a significant drop in inventory. Traders raised their premiums and discounts, supporting the rise in premiums and discounts.

Tianjin: In Tianjin yesterday, the purchasing sentiment for refined zinc was 1.81, and the selling sentiment was 2.55. Zinc prices continued to rise, but downstream purchasing enthusiasm was low, with some still expecting a decline and remaining on the sidelines. There were few inquiries, and traders' sales were slightly stable, with trader-to-trader transactions dominating. Overall, market transactions were poor.

Ningbo: As the price difference between east China and south China widened, some zinc ingots from Guangdong arrived in the downstream market recently. Additionally, some downstream enterprises received pre-sold zinc ingots. Yesterday, overall spot transactions were sluggish, but spot supplies remained limited, and self pick-up from warehouse premium quotes by traders remained high.

Social Inventory: On December 8, LME zinc inventory increased by 2,375 mt to 57,750 mt, up 4.29%. According to SMM communication, as of this Monday (December 8), the total SMM zinc ingot inventory across seven regions was 136,000 mt, down 8,200 mt from December 1 and down 4,300 mt from December 4, indicating a decrease in domestic inventory.

Zinc Price Outlook: Overnight, the LME zinc contract recorded a bullish candlestick, with support from various moving averages. The US Fed will hold its interest rate meeting this week, and market sentiment is relatively hawkish. LME zinc prices are expected to continue rising slightly. Overnight, the SHFE zinc contract recorded a small bearish candlestick, but support from various moving averages below remains. The CPC Politburo held a meeting yesterday, stating that in 2026, the economy will continue to implement more proactive fiscal policy and moderately loose monetary policy, boosting macro sentiment. Meanwhile, domestic inventory has decreased again, but downstream consumption remains mediocre. SHFE zinc prices are expected to continue hovering at highs.

Data Source Statement: Except for public information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and not as decision-making advice.