Macro disturbances were numerous, the US dollar index continued its upward trend, and LME zinc recorded a bearish candlestick [SMM Morning Meeting Minutes]

Futures: Overnight, LME zinc opened at $3,370/mt, initially fluctuating downward to a low of $3,238/mt, then gradually rebounding to a high of $3,377/mt. During the night session, it maintained a fluctuating trend and finally closed down at $3,318.5/mt, down $51.5/mt, a decrease of 1.53%. Trading volume increased to 153,000 lots, while open interest decreased by 3,702 lots to 236,000 lots. Overnight, the most-traded SHFE zinc 2603 contract opened at 24,975 yuan/mt, initially dipping slightly to 24,615 yuan/mt. Subsequently, short-covering pushed SHFE zinc higher, reaching a peak of 25,065 yuan/mt. It maintained a fluctuating trend towards the session close, finally settling up at 24,890 yuan/mt, up 375 yuan/mt, an increase of 1.53%. Trading volume decreased to 181,000 lots, while open interest decreased by 4,974 lots to 86,235 lots.

Macro: The US Bureau of Labor Statistics postponed the employment report originally scheduled for Friday; ISM data indicated that US manufacturing returned to expansion territory after one year; Trump: Reached a trade agreement with India, reciprocal tariffs will be reduced from 25% to 18%; Trump plans to establish a $12 billion critical minerals strategic reserve named the "Gold Reserve Plan"; It is reported that the Iranian President has ordered the initiation of special negotiations with the US on nuclear issues; Shanghai Gold Exchange (SGE): Adjusted margin levels and price limits for silver deferred contracts; Revalued fund assets, the SDIC Silver LOF fund's net value fell 31.5% in a single day; Ministry of Finance issued an announcement regarding VAT input tax credit and related matters; Nine units including the Ministry of Commerce issued the "2026 'Happy Shopping Chinese New Year' Spring Festival Special Activity Plan".

Spot:

Shanghai: Yesterday, the refined zinc purchasing sentiment in the Shanghai region was 2.08, while the selling sentiment was 2.67. In the morning, zinc futures prices weakened, prompting some downstream users to make fixed-price purchases on dips. Traders took the opportunity to raise selling prices, leading to an increase in spot premiums. However, as the wave of downstream enterprise holidays began, overall spot transaction improvement was limited.

Guangdong: The refined zinc purchasing sentiment in the Guangdong region was 1.96, while the sales sentiment was 2.50. Yesterday, the price center of zinc declined, leading to a rebound in purchasing enthusiasm among downstream enterprises that had not yet started holidays. Fixed-price transactions increased in the market, and trading among traders also recovered somewhat. Overall transactions improved, with spot premiums and discounts edging slightly higher.

Tianjin: Yesterday, the refined zinc purchasing sentiment in the Tianjin region was 1.93, while the selling sentiment was 2.25. Zinc prices pulled back significantly. Towards the session close, zinc prices fell to levels more acceptable to downstream users, leading to a small number of downstream enterprises conducting final pre-holiday restocking. Market traders slightly raised their selling prices. Overall market performance improved compared to Friday.

Ningbo: In the morning, zinc futures prices declined. Some downstream users engaged in fixed-price purchasing, but most continued to watch with a bearish view. Overall spot transaction performance was average, with some traders also selling off goods. The narrowing of spot discounts was limited.

Inventory: On February 2, LME zinc inventory decreased by 900 mt to 109,100 mt, down 0.82%. According to SMM communication, as of this Monday (February 2), domestic zinc ingot inventory increased.

Zinc Price Forecast: Overnight, LME zinc recorded a long lower shadow bearish candlestick, suppressed by the 5-day daily average above and supported by the middle Bollinger Bands below. As investors weighed the policy outlook under Wash's leadership of the US Fed and the US manufacturing sector's return to expansion territory in January, the US dollar index continued its upward trend, and LME zinc's center moved lower. Overnight, SHFE zinc recorded three consecutive bearish candlesticks, suppressed by the 5-day daily average above and supported by the 40/60-day daily averages below. Over time, more enterprises entered holidays, leading to some inventory buildup in domestic social inventory. However, TCs continued to fluctuate at lows, coupled with recent macro disturbances. Zinc prices were expected to maintain a fluctuating trend at highs in the short term.

Data Source Statement: Except for publicly available information, other data were processed by SMM based on public information, market communication, and SMM's internal database model, for reference only and not constituting decision-making advice.