LME Zinc Records Four-Day Winning Streak, Bulls Dominate Futures [SMM Morning Meeting Minutes]

Zinc Morning Meeting Minutes for January 6

Futures: Overnight, LME zinc opened at $3,139.5/mt, initially dipped to $3,136/mt, then continued to rise, reaching a high of $3,213.5/mt during the night session, and finally closed up at $3,208/mt, an increase of $81/mt, or 2.59%. Trading volume increased to 94,523 lots, and open interest rose by 1,084 lots to 231,000 lots. Overnight, the most-traded SHFE zinc 2602 contract opened at 23,775 yuan/mt. Early in the session, bulls increased positions, pushing zinc up rapidly to a high of 24,150 yuan/mt. Towards the end, some bulls reduced positions and exited, causing a slight pullback. It finally closed up at 24,030 yuan/mt, an increase of 210 yuan/mt, or 0.88%. Trading volume was 73,828 lots, and open interest increased by 4,728 lots to 94,670 lots.

Macro:
It was reported that several oil tankers broke through the US blockade and left Venezuelan waters; US Fed's Kashkari believed interest rates are now close to neutral; US Vice President Vance's residence was attacked, police arrested one person; Reports indicated Israel conveyed a message of "no intention to fight further" to Iran via Putin; Azerbaijan's State Oil Fund profited over $10 billion from gold investments; Ministry of Foreign Affairs: China-Venezuela cooperation is protected by international law and the laws of both countries.

Spot:
Shanghai: Yesterday, the purchasing sentiment for refined zinc in the Shanghai area was 2.02, and the willingness to sell was 2.24. After the New Year's Day holiday, few traders were selling in the Shanghai market yesterday. Overall supply remained tight, traders continued to hold prices firm, and spot premiums hovered at highs. However, zinc futures prices rose significantly, downstream buyers showed fear of high prices with almost no purchasing inquiries, and overall trading was sluggish.
Guangdong: Yesterday, the purchasing sentiment for refined zinc in the Guangdong area was 2.06, and the sales sentiment was 2.65. Overall, zinc prices rose significantly yesterday, downstream fear of high prices emerged, but some downstream enterprises still had rigid post-holiday restocking demand. Coupled with traders' low willingness to sell at low prices, spot premiums and discounts edged up slightly.
Tianjin: Yesterday, Tianjin reported prices for the contract rollover. The purchasing sentiment for refined zinc in the Tianjin area was 1.81, and the willingness to sell was 2.02. Zinc prices broke through resistance and rose, downstream buyers were cautious due to high prices, trader quotes were chaotic, market sales were limited, premiums edged up slightly, and overall market trading was sluggish.
Ningbo: On the first trading day after the holiday, few traders were selling in the market yesterday. Overall spot quotes showed significant divergence. Additionally, with zinc futures prices rising sharply in the morning session, most downstream enterprises adopted a wait-and-see approach, and overall spot trading was sluggish.

Inventory: On January 5, LME zinc inventory decreased by 475 mt to 105,850 mt, a change of 7.49%. According to SMM communication, as of this Monday (January 5), domestic zinc ingot inventory increased.

Zinc Price Forecast: Overnight, LME zinc recorded a four-day winning streak, supported by various moving averages below. Currently, international regional geopolitical tensions are tightening, coupled with the boost from strong gains in base metals like copper. Bulls continued to pour funds into the futures, pushing the price center of LME zinc steadily higher. Overnight, SHFE zinc recorded a bullish candlestick, supported by various moving averages below. Driven by gains in LME zinc overnight, SHFE zinc prices broke through the high since February last year, and the center of the daily candlestick shifted up noticeably. Although fundamentals haven't changed significantly, numerous macro disturbances and momentum from other metals provide sufficient bullish momentum. SHFE zinc is expected to fluctuate at highs in the short term.

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 do not constitute decision-making advice.