Overnight, the LME zinc recorded a bullish candlestick with a higher center [SMM Morning Meeting Minutes]

Zinc Morning Meeting Minutes for January 28

Futures: Overnight, LME zinc opened at $3,336/mt. It briefly dipped to $3,299.5/mt at the beginning of the session, then its center shifted to fluctuate near the daily average line. Subsequently, bulls increased their positions, pushing the center of LME zinc up slowly. It finally closed at the day's high of $3,358.5/mt, up $7.5/mt, a change of 0.22%. Trading volume decreased to 11,350 lots, while open interest increased by 3,054 lots to 234,000 lots. Overnight, the most-traded SHFE zinc 2603 contract opened at 24,920 yuan/mt. After a brief rally at the start, momentum weakened and its center quickly pulled back. After touching a low of 24,820 yuan/mt, bears took profits and exited, leading SHFE zinc to rise again and touch a high of 25,175 yuan/mt. It finally closed up at 25,025 yuan/mt, up 25 yuan/mt, a change of 0.1%. Trading volume decreased to 123,000 lots, while open interest decreased by 1,180 lots to 118,000 lots.

Macro: Trump: Not worried about the US dollar depreciation, can let it change like a yo-yo; Trump: US has dispatched a large naval fleet towards Iran; Fed mouthpiece: US Fed is expected to pause interest rate cuts; EU satellite communication plan has been launched; Japan and US reportedly plan to lay out synthetic diamond production; China's above-scale industrial enterprises achieved a 0.6% year-on-year profit growth in 2025; UK Prime Minister Starmer will visit China; Ministry of Human Resources and Social Security: The year-end cumulative balance of the three social insurance funds for the full year was 10.2 trillion yuan; E Fund Gold Theme LOF and SDIC Silver LOF suspended subscriptions from the 28th.

Spot Market:

Shanghai: The refined zinc purchase sentiment in Shanghai was 2.08, while the sales sentiment was 2.59. Yesterday, traders in the Shanghai market resumed holding prices firm, the decline in spot premiums temporarily halted. Zinc futures prices held up well, downstream enterprises made purchases as needed, overall spot trading remained average.

Guangdong: The refined zinc purchase sentiment in Guangdong was 1.97, while the sales sentiment was 2.44. Overall, yesterday, the center of zinc prices moved higher, downstream purchase willingness weakened, market transactions were mostly for rigid demand. However, Guangdong inventory was low, and the premiums/discounts quoted by traders remained relatively high. Consequently, spot premiums and discounts continued to hold up well.

Tianjin: The refined zinc purchase sentiment in Tianjin was 1.87, while the sales sentiment was 2.27. Yesterday, zinc prices continued to fluctuate at highs, end-use demand was weak, downstream had little stockpiling demand, were cautious about purchasing at high prices, mainly restocking for rigid demand. Market traders slightly lowered offers for unsold cargo, trading was primarily among traders, overall market transactions were poor.

Ningbo: Some downstream zinc users began holidays, market demand for zinc ingots weakened. Yesterday, downstream purchase willingness was not high, coupled with persistently high zinc futures prices, overall spot premiums in the market continued to decline. Social Inventory: On January 27, LME zinc inventory decreased by 775 mt to 110,550 mt, a drop of 0.7%. According to SMM communication, domestic inventory declined again as of January 26.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a bullish candlestick with a shaved head, and the MACD bullish candlestick expanded. As the US dollar fell to a nearly four-year low and geopolitical instability provided support at the bottom of zinc prices, coupled with continuous declines in LME zinc inventory, zinc prices showed a strong trend. Overnight, SHFE zinc recorded a bullish candlestick, with various moving averages below providing support, and the KDJ gap expanded upward. Driven by the LME, zinc prices continued to fluctuate at highs. Combined with low TC and destocking in social inventory, zinc prices have strong bottom support, and are expected to continue fluctuating at highs in the short term.

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 as decision-making advice.