US Dollar Index Rebounds, LME Zinc Center Shifts Downward [SMM Zinc Morning Meeting Minutes]

Zinc Morning Meeting Minutes for January 22

Futures: Overnight, LME zinc opened at $3,179.5/mt, fluctuated upward after opening, touched a high of $3,211/mt during the session, then pulled back from the high, touched a low of $3,164/mt by the end of the session, and finally closed flat at $3,175/mt. Trading volume decreased to 10,031 lots, and open interest decreased by 2,551 lots to 229,000 lots. Overnight, the most-traded SHFE zinc 2603 contract opened at 24,350 yuan/mt, touched a high of 24,485 yuan/mt at the beginning of the session, then fluctuated downward, touched a low of 24,275 yuan/mt by the end of the session, and finally closed down 50 yuan/mt, or 0.21%, at 24,300 yuan/mt. Trading volume decreased to 68,738 lots, and open interest decreased by 1,699 lots to 120,000 lots.

Macro: Trump is expected to announce the new US Fed Chairman candidate soon, but there are concerns about potential disloyalty after appointment; Details of a potential Greenland agreement revealed: a small land parcel for a US military base; US Supreme Court may reject Trump's request to remove Fed Governor Cook; Trump: Stock market decline is insignificant, the market will double; Swedish pension giant clears most of its US Treasury holdings; SDIC Silver LOF: Trading halted from the market open on January 22 until the close; Jensen Huang reportedly plans to visit China in late January.

Spot Market:

Shanghai: Yesterday, the refined zinc purchasing sentiment in Shanghai was 2.24, and the selling sentiment was 2.61. Zinc futures prices moved lower MoM, some downstream enterprises started point pricing at lows from the night before last, spot market transactions improved somewhat, traders raised their offers, and Shanghai spot premiums increased MoM.

Guangdong: Yesterday, the refined zinc purchasing sentiment in Guangdong was 2.05, and the selling sentiment was 2.59. Overall, the price center moved lower yesterday, downstream purchasing enthusiasm warmed up slightly, increased inquiries and point pricing drove improved transactions, while spot goods in Guangdong warehouses continued to decrease; multiple factors drove spot premiums/discounts upward.

Tianjin: Yesterday, the refined zinc purchasing sentiment in Tianjin was 1.97, and the selling sentiment was 2.23. Zinc prices continued to decline yesterday, still not reaching downstream psychological price levels, restocking was primarily for rigid demand, trader offers were flat compared to the previous day, and overall market transactions were average.

Ningbo: Previously low-priced zinc ingots were mostly sold out, the available goods in the Ningbo market were limited yesterday, coupled with declining futures prices, traders mostly raised spot offers. Although some downstream users conducted point pricing at lows, actual purchases by downstream enterprises were mostly based on demand, resulting in limited overall improvement in spot transactions.

Social Inventory: On January 20, LME zinc inventory decreased by 450 mt to 111,850 mt, down 0.4%. According to SMM communication, as of January 19, domestic inventory increased.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a bearish candlestick, with the 10-day daily average line forming resistance above. Trump stated that a framework for a future agreement on Greenland has been established, and the US dollar index rebounded from a low level, exerting pressure on zinc prices. The center of LME zinc prices shifted downward, and it is expected to maintain a fluctuating trend in the short term. Overnight, SHFE zinc recorded a bearish candlestick, with the 10-day daily average line forming resistance above. Recently, some downstream zinc consumers in China have begun holidays, leading to a gradual weakening of downstream demand. Supply-side pressure is also limited, and fundamentals provide insufficient support for zinc prices. Coupled with the influence of LME trends, SHFE zinc declined during the night session.

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. They are for reference only and do not constitute decision-making advice.