U.S. dollar index closed lower, boosting LME zinc to rise [SMM Morning Meeting Minutes]

SMM January 15 News:

Futures: Overnight, LME zinc opened at $3,212/mt. It fluctuated considerably along the daily average line in early trading, touched a low of $3,197.5/mt during European hours, then rose steadily after bears exited the market, reaching a high of $3,292/mt before closing, and finally settled at $3,290/mt, up $88/mt, a gain of 2.75%. Trading volume decreased to 16,389 lots, and open interest fell by 3,909 lots to 228,000 lots. Overnight, the most-traded SHFE zinc 2603 contract opened at 24,740 yuan/mt. It quickly dipped to a low of 24,475 yuan/mt initially, then rose rapidly after bulls increased positions, touching a high of 24,945 yuan/mt, and finally settled at 24,795 yuan/mt, up 320 yuan/mt, a gain of 1.31%. Trading volume decreased to 175,000 lots, and open interest increased by 9,294 lots to 130,000 lots.
Macro: Trump: Propose 25% tariff on imported chips not used for US AI; Trump hinted at delaying military action against Iran; The US Supreme Court did not rule on the legality of Trump's tariffs; The gold/silver ratio fell below the 50 mark; Raising the margin ratio from 80% to 100%, the Shanghai, Shenzhen, and Beijing Stock Exchanges adjusted the financing margin ratio; The Ministry of Finance held a nationwide video conference to promote a package of policies for fiscal and financial synergy to boost domestic demand.
Spot Market:
Shanghai: Yesterday, the refined zinc purchase sentiment in Shanghai was 2.08, and the selling sentiment was 2.62. Zinc futures prices continued to rise in the morning session, downstream buyers were hesitant towards high prices, spot purchase enthusiasm was poor, overall transactions were sluggish, traders actively offered to sell, and overall spot premiums continued to decline, with spot trades mainly occurring among traders.
Guangdong: Yesterday, the refined zinc purchase sentiment in Guangdong was 1.92, and the selling sentiment was 2.60. Overall, zinc price center continued to rise yesterday, trader offers were basically flat compared to the previous day, but downstream purchase demand was sluggish under high prices, some traders slightly lowered premiums and discounts to facilitate sales.
Tianjin: Yesterday, the refined zinc purchase sentiment in Tianjin was 1.83, and the selling sentiment was 2.45. Zinc prices continued to climb yesterday, excessively high prices were difficult for downstream users to accept, few fixed-price transactions occurred, traders lowered their offers to sell, premiums declined, and overall market transactions were sluggish.
Ningbo: Zinc ingots from South China continued to flow into the Ningbo market, supplementing market supply. Coupled with poor year-end orders and enterprises holding some inventory, downstream inquiries were few yesterday, overall spot transactions were average, and premiums continued to slide.
Social Inventory: On January 14, LME zinc inventory decreased by 175 mt to 106,725 mt, a drop of 0.16%. According to SMM communication, as of January 12, domestic inventory slightly decreased.
Zinc Price Forecast: Overnight, the LME zinc contract recorded a large bullish candlestick. Despite retail sales data exceeding expectations, political uncertainty surrounding the US Fed's independence persisted, causing the US dollar index to close lower. Combined with geopolitical risks, precious metals continued to rally, driving LME zinc higher. Overnight, the SHFE zinc contract recorded a small bullish candlestick, as overseas macro sentiment remained favorable, domestic funds continued to flow in, and capital crowding remained high, pushing the SHFE zinc price center upward.

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