LME inventory continues to increase, LME zinc center moves downward [SMM Morning Meeting Minutes]

SMM December 19 news:

Futures: Overnight, LME zinc opened at $3,065/mt, initially fluctuating considerably along the daily average line. During European trading hours, bulls reduced positions, causing LME zinc to quickly pull back to a low of $3,045/mt. Subsequently, downward momentum weakened, and LME zinc rose during the night session to a high of $3,082/mt, finally closing down at $3,058/mt, a decrease of $13.5/mt or 0.44%. Trading volume fell to 9,734 lots, and open interest decreased by 395 lots to 227,000 lots. Overnight, the most-traded SHFE zinc 2602 contract opened at 22,985 yuan/mt, initially pulling back to a low of 22,935 yuan/mt. Subsequently, bulls increased positions, and SHFE zinc fluctuated upward to a high of 23,085 yuan/mt by the end of the session, finally closing up at 23,060 yuan/mt, an increase of 25 yuan/mt or 0.11%. Trading volume fell to 43,757 lots, and open interest increased by 959 lots to 84,684 lots.
Macro:
US November CPI beat expectations; US White House National Economic Council Director Hassett: The US Fed still has significant room for interest rate cuts; EU sanctions 41 Russian "shadow fleet" vessels; European Central Bank holds steady; UK central bank cuts interest rates by 25 basis points; Japan's Minister of State for Economic and Fiscal Policy Minoru Shirokawa will attend the Bank of Japan's monetary policy meeting on Friday; Trump Media & Technology Group plans to merge with a nuclear fusion startup, stock price surges over 40%; Foreign Minister Wang Yi held separate phone calls with his counterparts from Cambodia and Thailand; Ministry of Commerce: Approved some rare earth export general license applications; State Administration for Market Regulation: Comprehensive measures needed to address "involution-style" competition.
Spot:
Shanghai: Yesterday, the purchasing sentiment for refined zinc in Shanghai was 2.33, and the sales sentiment was 2.58. Zinc futures maintained a fluctuating trend, downstream enterprises had largely completed earlier point pricing, yesterday's purchases were mostly for rigid demand, spot cargo volume in the trading market was limited, traders continued to hold prices firm, and spot premiums fluctuated at highs.
Guangdong: Yesterday, the purchasing sentiment for refined zinc in Guangdong was 2.04, and the sales sentiment was 2.43. Overall, the zinc price center rose slightly, coupled with downstream restocking at earlier low prices, purchasing demand pulled back, but trading among traders was relatively active.
Tianjin: Yesterday, the purchasing sentiment for refined zinc in Tianjin was 2.04, and the sales sentiment was 2.55. Yesterday, zinc prices mainly fluctuated, due to environmental protection measures in the north, demand weakened, downstream restocking was primarily for rigid demand, while trader quotations held steady, overall market trading weakened compared to the previous day.
Ningbo: Earlier market cargo volume gradually digested, yesterday spot cargo in Ningbo was scarce, some traders took the opportunity to significantly raise spot quotations, overall spot premiums continued to rise yesterday, some downstream enterprises lacking cargo passively accepted high spot premiums, overall spot trades were somewhat sluggish.
Social inventory: On December 18, LME zinc inventory increased by 1,700 mt or 1.74% to 99,400 mt; according to SMM communication, as of Thursday (December 18), domestic inventory decreased.
Zinc price forecast: Overnight, LME zinc recorded a small bearish candlestick, with continued destocking pace at LME, easing concerns over inventory, and the center of LME zinc shifted slightly downward. It is expected that LME zinc will fluctuate mainly today. Overnight, SHFE zinc recorded a small bullish candlestick, with continued destocking of domestic zinc ingot, while zinc concentrate TCs continue to decline, indicating strong support from the domestic zinc supply side. The center of SHFE zinc shifted upward, and it is expected that SHFE zinc will fluctuate mainly today.

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 constituting decision-making advice.