Atacocha Mine Temporarily Suspends Operations, LME Zinc Center Shifts Upward [SMM Zinc Morning Meeting Minutes]

Zinc Morning Meeting Minutes for January 23

Futures: Overnight, LME zinc opened at $3,185/mt. After opening, LME zinc fluctuated upward, hitting a low of $3,174.5/mt early in the session and reaching a high of $3,243.5/mt late in the session, finally closing up at $3,233/mt, up $58/mt, a gain of 1.83%. Trading volume decreased to 9,939 lots, and open interest decreased by 649 lots to 229,000 lots. Overnight, the most-traded SHFE zinc 2603 contract opened at 24,350 yuan/mt. Early in the session, it touched a low of 24,340 yuan/mt, then fluctuated upward, reaching a high of 24,560 yuan/mt during the session, before pulling back slightly to near the daily average line, finally closing up at 24,530 yuan/mt, up 130 yuan/mt, a gain of 0.53%. Trading volume increased to 70,981 lots, and open interest increased by 890 lots to 119,000 lots.

Macro: Trump warned of "major retaliation" if Europe sells off US assets; Trump and representatives from over ten countries and regions signed documents at Davos to launch a "Peace Commission"; The Trump administration is reportedly seeking to "prompt regime change in Cuba" by the end of the year; Trump sued JPMorgan Chase for closing his accounts for political reasons, claiming $5 billion in damages; SpaceX has reached agreements with four banks to prepare for a "mega IPO"; Pan Gongsheng: There is still some room for RRR cuts and interest rate cuts this year; Blue Arrow Aerospace's IPO review status changed to "under inquiry"; SDIC Silver LOF: Trading will be suspended from market open until 10:30 on January 23; It is reported that Alibaba's chip company T-Head plans an independent listing.

Spot Market:

Shanghai: Yesterday, the refined zinc purchasing sentiment in Shanghai was 2.14, and the selling sentiment was 2.55. There were few traders selling in the market, with some holding prices firm. Some traders raised spot quotes, but futures also rose. Downstream purchasing sentiment was not high yesterday, and overall spot trading was weaker than the previous day.

Guangdong: Yesterday, the refined zinc purchasing sentiment in Guangdong was 2.06, and the sales sentiment was 2.53. Overall, zinc prices are hovering at highs, with downstream purchases mainly for rigid demand. However, affected by the continuous decline in spot inventory at Guangdong warehouses, some traders held quotes firm, and spot premiums/discounts edged up slightly.

Tianjin: Yesterday, the refined zinc purchasing sentiment in Tianjin was 1.92, and the selling sentiment was 2.24. Zinc prices rebounded slightly yesterday. Downstream buyers were cautious due to high prices, purchasing mainly for rigid demand restocking. Market traders slightly lowered their quotes, with trading mainly among traders. Overall market trading was average.

Ningbo: Yesterday, quotes in the Ningbo market varied significantly. Some traders sold passively, maintaining high spot quotes. Downstream enterprises purchased based on demand. Overall spot trading performance was average.

Social Inventory: On January 21, LME zinc inventory decreased by 150 mt to 111,700 mt, down 0.13%. According to SMM communication, domestic inventory decreased as of January 22.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a bullish candlestick, supported by the 20-day moving average. Although Trump abandoned tariff threats and panic sentiment from Greenland subsided, Nexa suspended production at the Atacocha San Gerardo open-pit mine due to community road blockades, causing some disruption in mine supply. LME zinc rose from lows, with the overall price center shifting upward. Overnight, SHFE zinc recorded a bullish candlestick, with the KDJ divergence widening. Domestic zinc ingot social inventory saw a brief decline, coupled with overseas supply disruptions, leading SHFE zinc to rise during the night session. However, considering persistent weak domestic consumption, short-term upside room is expected to be limited.

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.