Initial jobless claims surged last week LME zinc recorded a large bullish candlestick [SMM Morning Meeting Minutes]

Futures: Overnight, LME zinc opened at $3,087/mt. After opening, it maintained a fluctuating trend and slightly dipped to $3,080/mt. During European trading hours, short covering pushed prices to rise continuously, surging to $3,219.5/mt by the close. It finally settled at $3,198/mt, up $123/mt, a gain of 4.00%. Trading volume increased to 156,000 lots, while open interest decreased by 2,058 lots to 220,000 lots. Overnight, the most-traded SHFE zinc 2601 contract opened higher with a gap at 23,210 yuan/mt. At the beginning of the session, long positions increased, and SHFE zinc fluctuated upward, reaching a high of 23,690 yuan/mt by the close. It finally settled at 23,660 yuan/mt, up 665 yuan/mt, a gain of 2.89%. Trading volume increased to 113,000 lots, while open interest increased by 5,307 lots to 93,806 lots.

Macro: The US Fed reappointed 11 regional Fed presidents; US initial jobless claims last week recorded the largest weekly increase since the pandemic; Informed sources: The US, Ukraine, and Europe will hold a meeting on the Russia-Ukraine conflict in Paris on Saturday; Zelensky responded to territorial compromise issues; The US Treasury Department intensified sanctions against Venezuela; The Central Economic Work Conference was held in Beijing from December 10 to 11; Multiple securities firms' relevant responsible persons responded to "quantitative trading equipment being removed from exchanges."

Spot:

Shanghai: Yesterday, the purchasing sentiment for refined zinc in the Shanghai area was 2.28, and the selling sentiment was 2.56. Zinc ingot availability in the Shanghai market was limited. The average spot price continued to rise, with overall premiums fluctuating at highs. Downstream users remained cautious of high prices, purchasing spot cargo as needed. Trading was still mainly among traders. Continued attention is needed on the flow of cargo from other regions to the east China market.

Guangdong: Yesterday, the purchasing sentiment for refined zinc in the Guangdong area was 1.92, and the selling sentiment was 2.41. Overall, zinc prices continued to fluctuate, with no significant change in downstream demand, which remained primarily rigid. Market transactions were relatively average. Traders' quotes showed little change from the previous day, and spot premiums and discounts remained flat.

Tianjin: Yesterday, the purchasing sentiment for refined zinc in the Tianjin area was 1.83, and the selling sentiment was 2.50. Zinc prices fluctuated yesterday. Downstream users mainly restocked based on rigid demand, while traders had a firm price mentality. Trading was mainly among traders, and overall market transactions were average.

Ningbo: Long-term contract zinc ingots arrived in Ningbo, but spot cargo in the market remained scarce. Traders' spot premium quotes fluctuated at highs. Coupled with high zinc futures prices, downstream enterprises' orders were average during the off-season, and inquiries and purchases of zinc ingots were moderate.

Inventory: On December 11, LME zinc inventory increased by 550 mt to 60,350 mt, up 0.92%. According to SMM communication, as of Thursday, December 11, the total zinc ingot inventory in seven SMM regions was 128,200 mt, down 12,100 mt from December 4 and down 7,800 mt from December 8. Domestic inventory decreased.

Zinc Price Forecast: Overnight, the LME zinc recorded a large bullish candlestick, supported below by the 20/60-day daily averages. The number of initial jobless claims in the US last week reached 236,000, marking the largest weekly increase since the pandemic. The US dollar index continued its decline, while the LME zinc's price center moved higher. Overnight, SHFE zinc also recorded a large bullish candlestick, supported below by the 10/60-day daily averages. During the week, China held the Central Economic Work Conference, which identified the key economic priorities for the coming year, boosting market sentiment to some extent. Bulls exerted strength, and coupled with the influence from the LME, SHFE zinc rose.

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.