Weak US Dollar + Rising Overseas Smelting Costs, LME Zinc Records a Three-Day Winning Streak [SMM Morning Meeting Minutes]

Zinc Morning Meeting Minutes for January 27

Futures: Overnight, LME zinc opened at $3,279/mt. Initially, it fluctuated around the daily average line, then rose with fluctuations driven by increased long positions, approaching the night session high of $3,373/mt. Entering the night session, the center slightly dipped to $3,345/mt, and finally closed up at $3,351/mt, up $82/mt, a gain of 2.51%. Trading volume increased to 16,562 lots, and open interest rose by 1,044 lots to 231,000 lots. Overnight, the most-traded SHFE zinc 2603 contract opened higher with a gap at 25,280 yuan/mt. Initially, it moved slightly lower from the high and fluctuated near the daily average line, with fluctuations within 300 yuan/mt, finally closing up at 25,100 yuan/mt, up 340 yuan/mt, a gain of 1.37%. Trading volume decreased to 147,000 lots, and open interest increased by 1,456 lots to 123,000 lots.

Macro: OPEC+ representatives: March may maintain the production policy of halting output increases; Bank of Japan account data shows no clear signs of foreign exchange market intervention last Friday; Probability of US government shutdown before January month-end is about 80%; Trump stated that the Iran situation is "fast-changing," but he believes Iran indeed wants to reach a deal; Trump: Raised South Korea's reciprocal tariff from 15% to 25%; People's Bank of China held the 2026 macro-prudential work conference.

Spot Market:

Shanghai: Shanghai region refined zinc purchasing sentiment was 2.1, selling sentiment was 2.63. Shanghai market traders actively offered and quoted; zinc futures prices continued to rise; downstream enterprises purchased as needed; overall transaction performance was average; traders continued to lower spot quotations to secure deals; Shanghai spot premiums slightly declined.

Guangdong: Guangdong region refined zinc purchasing sentiment was 1.98, selling sentiment was 2.51. Overall, yesterday's zinc price center rose; downstream procurement enthusiasm was low; overall market transaction atmosphere was light, but some downstream just-in-time procurement remained; coupled with limited spot availability in the Guangdong market, market premiums and discounts remained relatively firm.

Tianjin: Tianjin region refined zinc purchasing sentiment was 1.91, selling sentiment was 2.22. Yesterday, zinc prices rebounded; most downstream entered holiday pace; just-in-time restocking was the main activity; market traders held quotations steady; trading was mainly among traders; overall market transactions were poor.

Ningbo: Tianjin region refined zinc purchasing sentiment was 1.91, selling sentiment was 2.22. Yesterday, zinc prices rebounded; most downstream entered holiday pace; just-in-time restocking was the main activity; market traders held quotations steady; trading was mainly among traders; overall market transactions were poor. Social Inventory: On January 26, LME zinc inventory decreased by 175 mt to 111,325 mt, a drop of 0.16%; According to SMM communication, as of January 26, domestic inventory declined again.

Zinc Price Forecast: LME zinc recorded a three-day winning streak overnight, with the center of the daily candlestick moving higher and the MACD bullish candlestick expanding. The US dollar fell to a four-month low, providing support for nonferrous metals, while the cold winter caused a sharp rise in natural gas prices in Europe and the US, increasing overseas smelting costs. Subsequent attention will be paid to the production status of overseas smelters, and zinc prices are expected to fluctuate at highs. SHFE zinc stopped rising and started to fall overnight, but the center of the daily candlestick moved higher. Geopolitical instability persists, and gold and silver prices hit new highs again. Positive macro sentiment drove zinc prices to fluctuate at highs, but weak consumption during the off-season limited the extent of the rise.

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 do not constitute decision-making advice.