LME Closed for Christmas Holiday, SHFE Zinc Maintains Fluctuating Trend [SMM Zinc Morning Meeting Minutes]

Zinc Morning Meeting Minutes for December 26

Futures: Overnight, LME was closed due to the Christmas holiday. Overnight, the most-traded SHFE zinc 2602 contract opened at 23,055 yuan/mt. After opening, SHFE zinc fluctuated rangebound around the daily average line. At the beginning of the session, it touched a high of 23,135 yuan/mt, then pulled back slightly to test a low of 23,010 yuan/mt. Subsequently, SHFE zinc continued to fluctuate and finally closed up at 23,105 yuan/mt, an increase of 40 yuan/mt, or 0.17%. Trading volume increased to 57,153 lots, and open interest increased by 1,711 lots to 95,033 lots.

Macro: Russian Deputy Prime Minister Novak: The plan to produce 100 million mt of liquefied natural gas annually was delayed for several years due to sanctions, but plant construction continues; Japanese Prime Minister: The total amount of new Japanese government bonds issued in the next fiscal year will reach 29.6 trillion yen; Cambodia and Thailand continued to hold meetings at the border to discuss ceasefire matters; SDIC Silver LOF was suspended from market opening until 10:30 on the 26th, with the regular fixed-amount investment limit for Class A fund shares set at 100 yuan; Four leading silicon wafer enterprises jointly raised their quotes significantly.

Spot Market:

Shanghai: Yesterday, the purchase willingness for refined zinc in the Shanghai area was 2.31, and the selling willingness was 2.63. Approaching year-end, some traders were clearing inventory, leading to relatively strong selling willingness. Yesterday, spot premiums in the market continued to be adjusted downward, while some downstream users started buying the dip from the previous night. However, spot purchases remained rigid, and overall spot trades did not show significant improvement.

Guangdong: Yesterday, the purchase willingness for refined zinc in the Guangdong area was 2.05, and the selling willingness was 2.56. Overall, yesterday, the price center of zinc pulled back, and downstream purchase willingness warmed up. Meanwhile, many traders recently closed accounts for settlement, reducing the number of sellers. Coupled with the narrowing of the price spread between futures contracts yesterday, spot premiums/discounts rose slightly.

Tianjin: Yesterday, the purchase willingness for refined zinc in the Tianjin area was 2.05, and the selling willingness was 2.31. Yesterday, the price center of zinc moved lower, downstream buying the dip increased, while most traders were engaged in year-end settlement, resulting in fewer traders selling in the market. Premiums rose slightly, and overall market trades improved compared to the previous day.

Ningbo: Year-end long-term contracts have basically ended, and the volume of goods in the Ningbo market is gradually being digested. Yesterday, there were very few traders selling in the market, while downstream purchase willingness was also not high. Overall spot trades performed sluggishly.

Social Inventory: On December 23, LME zinc inventory increased by 7,900 mt to 106,875 mt, a rise of 7.98%. According to SMM communication, as of this Thursday (December 25), domestic inventory declined.

Zinc Price Forecast: Overnight, LME was closed due to the Christmas holiday. Overnight, SHFE zinc recorded a bullish candlestick, with the 20-day moving average forming resistance above. The monthly zinc concentrate TCs continued their downward trend, continuously compressing smelter profits. Supply-side reductions provided support for zinc prices, but considering the year-end off-season for consumption, SHFE zinc is expected to maintain a fluctuating trend.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and the SMM internal database model, and are for reference only, not constituting decision-making advice.