Macro sentiment remains positive, LME zinc center shifts upward [SMM Morning Meeting Minutes]

SMM January 12 News:

Futures: Last Friday, LME zinc opened at $3,131/mt. It briefly dipped at the beginning of the session, touching a low of $3,126.5/mt. Subsequently, bulls increased their positions, driving a rapid rally to a high of $3,165/mt. However, lacking sustained upward momentum, LME zinc fluctuated considerably around the daily average line, eventually closing up at $3,149/mt, an increase of $18/mt or 0.57%. Trading volume decreased to 11,232 lots, while open interest increased by 861 lots to 234,000 lots. Last Friday, the most-traded SHFE zinc 2603 contract opened at 24,045 yuan/mt. At the session's start, bulls added positions, pushing the price center higher to touch 24,155 yuan/mt. Following this, upward momentum waned, the price center shifted lower, and the contract touched a low of 23,915 yuan/mt before consolidating with fluctuations along the daily average line, ultimately closing flat at 24,015 yuan/mt. Trading volume fell to 39,978 lots, while open interest increased by 2,591 lots to 97,101 lots.
Macro: The White House confirmed that Trump's social media account inadvertently leaked aggregated employment data; Trump: No more Venezuelan oil and funds will flow to Cuba; Iranian President: The government recognizes peaceful protest actions and is willing to meet with protest groups; Takaichi Sanae plans to dissolve the House of Representatives and hold a general election in January; Ministry of Finance, State Taxation Administration: From April 1, 2026, cancel VAT export tax rebates for products including PV; Guangzhou Futures Exchange adjusts the price limit and trading margin standards for platinum and palladium futures contracts; The combined turnover of the Shanghai and Shenzhen stock markets historically surpassed the 3 trillion yuan mark for the fifth time.
Spot Market:
Shanghai: The purchasing sentiment for refined zinc in the Shanghai region was 2.16, while the selling sentiment was 2.57. Last Friday, more traders offered spot cargoes. Although futures continued to slide, downstream orders were weak, and spot inquiries remained scarce, resulting in poor spot trade performance. Spot premiums in the Shanghai market continued to decline.
Guangdong: The purchasing sentiment for refined zinc in the Guangdong region was 1.97, while the selling sentiment was 2.58. Overall, approaching the weekend coupled with a slight pullback in zinc prices last Friday led to a minor improvement in downstream purchasing sentiment. However, Guangdong inventory continued to decline, premiums quoted in the market were high, and transactions under these high premiums were relatively average. Some traders slightly lowered their premiums and discounts to facilitate sales.
Tianjin: The purchasing sentiment for refined zinc in the Tianjin region was 1.93, while the selling sentiment was 2.11. Last Friday, zinc prices pulled back slightly but still did not meet downstream psychological price levels. Downstream users primarily engaged in essential restocking with limited purchases. Traders slightly lowered their quotes, premiums edged down, and overall market transactions were sluggish.
Ningbo: Imported zinc ingots flowed into the Ningbo market. Last Friday, Ningbo premiums continued to slide, mainly due to poor orders from downstream alloy plants, leading to sluggish spot transaction performance. Traders continued to lower their premium quotes to encourage sales.
Social Inventory: On January 9, LME zinc inventory decreased by 550 mt to 107,450 mt, a decline of 0.51%. According to SMM communication and understanding, as of January 8, domestic inventory continued to increase.
Zinc Price Forecast: Last Friday, the LME zinc contract recorded a small bullish candlestick, with its center moving upward. US non-farm payroll employment in December increased less than expectations, and Trump triggered geopolitical uncertainty. Precious metals and non-ferrous metals generally rose, with a favorable macro atmosphere in the market and high capital enthusiasm, causing zinc prices to fluctuate at highs. Last Friday, SHFE zinc recorded a small bearish candlestick. Macro sentiment remained favorable, while from a fundamental perspective, the import window for ore opened, increasing options for smelters and slightly alleviating supply tightness. Demand remained relatively resilient, keeping SHFE zinc prices fluctuating at highs.

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 constituting decision-making advice.