Macro sentiment resurfaces, LME zinc ends three-day losing streak [SMM Morning Meeting Minutes]

SMM December 18:

Futures: Overnight, LME zinc opened at $3,041.5/mt. It fluctuated around the daily average line initially, then briefly dipped to a low of $3,034.5/mt during European trading hours. Subsequently, bears increased their positions, and LME zinc fluctuated upward, reaching a high of $3,085.5/mt during the night session, finally settling at $3,071.5/mt, up $36.5/mt or 1.20%. Trading volume fell to 13,235 lots, and open interest decreased by 5,382 lots to 227,000 lots. Overnight, the most-traded SHFE zinc 2602 contract opened at 23,030 yuan/mt. Bulls increased their positions initially, pushing the contract to fluctuate upward with its center rising to a high of 23,135 yuan/mt. It then fluctuated around the daily average line, finally settling at 23,065 yuan/mt, up 90 yuan/mt or 0.39%. Trading volume fell to 48,067 lots, while open interest increased by 515 lots to 81,289 lots.
Macro:
Silver hit a fresh record high above $66. A joint US Fed survey indicated tariffs continue to trouble enterprises, with prices expected to rise 4% next year. US Fed Governor Waller stated the interest rate level is 50 to 100 basis points above the neutral rate. The White House responded that no new sanctions against Russia have been decided yet. US media reported the US and Russia will hold talks on the Russia-Ukraine conflict in Miami this weekend. Reports indicated the Venezuelan navy escorted shipments of petroleum by-products. The Ministry of Finance reported securities transaction stamp tax totaled 185.5 billion yuan for January-November 2025, up 70.7% YoY.
Spot:
Shanghai: The purchasing sentiment for refined zinc in Shanghai was 2.37 yesterday, while the selling sentiment was 2.57. Zinc prices continued to decline in the morning, prompting some downstream users to fix prices on dips. Traders continued to hold prices firm. Spot premiums in the Shanghai market rose further yesterday. However, low-priced zinc ingots from factory deliveries continued to flow into downstream enterprises in east China, which mostly preferred purchasing these lower-priced factory-delivered goods. Trading in the Shanghai market remained predominantly among traders.
Guangdong: The purchasing sentiment for refined zinc in Guangdong was 2.08 yesterday, while the selling sentiment was 2.41. Overall, the price center moved lower, leading to increased downstream fix-price purchasing. Market activity picked up, but actual transactions did not show significant improvement. Spot premiums and discounts held steady.
Tianjin: The purchasing sentiment for refined zinc in Tianjin was 2.12 yesterday, while the selling sentiment was 2.57. Zinc prices continued to pull back yesterday. Following substantial restocking on dips the previous day, downstream activity yesterday was mostly price fixing, with actual transactions being moderate. Traders raised their offers slightly in line with the market. Trading among traders was active, and overall market activity was relatively brisk.
Ningbo: Futures zinc prices continued to fall. Market traders further raised spot offers. Although some downstream enterprises had made purchases earlier, some engaged in fix-price purchasing yesterday. Overall market performance was moderate.
Social Inventory: On December 17, LME zinc inventory increased by 2,150 mt or 2.25% to 97,700 mt. According to SMM communication, as of this Monday (December 15), domestic inventory decreased.
Zinc Price Forecast: Overnight, the LME zinc contract ended a three-day losing streak with a small bullish candlestick. The market remained concerned about US employment data, the US dollar index declined, non-ferrous metals generally rose, and the LME zinc price center moved higher. LME zinc is expected to trade mainly sideways today. Overnight, SHFE zinc recorded a small bullish candlestick. Fundamentally, environmental protection alerts in multiple domestic regions have dragged on consumption, but domestic zinc supply-side support remains strong, and the SHFE zinc price center moved higher. SHFE zinc is expected to trade mainly sideways 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 not intended as decision-making advice.