Base Metals Generally Rose, LME Zinc Center Slightly Shifted Upward [SMM Zinc Morning Meeting Minutes]

Zinc Morning Meeting Minutes for February 25

Futures: Overnight, LME zinc opened at $3,360/mt. After opening, LME zinc fluctuated upward, reaching a high of $3,431.5/mt near the beginning of the session. Subsequently, LME zinc continuously pulled back from the high, touching a low of $3,360/mt during the session, then maintained a fluctuating trend below the daily average line, finally closing up at $3,387.5/mt, an increase of $42/mt, or 1.26%. Trading volume increased to 9,709 lots, and open interest increased by 415 lots to 230,000 lots. Overnight, the most-traded SHFE zinc 2604 contract opened at 24,585 yuan/mt. At the session's start, SHFE zinc rose slightly to a high of 24,710 yuan/mt, then fluctuated and pulled back below the daily average line. After touching a low of 24,510 yuan/mt during the session, it maintained a fluctuating trend at lows, finally closing down at 24,550 yuan/mt, a decrease of 130 yuan/mt, or 0.53%. Trading volume decreased to 33,839 lots, and open interest increased by 3,574 lots to 85,021 lots.

Macro: Takayoshi Miyachi conveyed concerns about further interest rate hikes during a meeting with the Bank of Japan Governor last week; Coinbase launched stock trading services for all US users, enabling 5x24-hour weekly trading; The US military deployed 11 F-22 fighter jets to Israel; US Fed Collins: Likely to maintain the current interest rate for some time; Huawei's 2025 sales revenue exceeded 880 billion yuan; Ministry of Commerce: Added 20 Japanese entities to the watch list; Added 20 Japanese entities to the export control list.

Spot Market:

Shanghai: Yesterday, the purchasing sentiment for refined zinc in the Shanghai area was 1.78, and the shipment sentiment was 2.19. On the first trading day after the Chinese New Year, Shanghai zinc ingot inventory continued to accumulate, but downstream enterprises had not fully resumed work. Coupled with the rise in zinc futures prices in the morning session, downstream willingness to purchase zinc ingots was not high yesterday, and overall market shipments were sluggish.

Guangdong: Yesterday, the purchasing sentiment for refined zinc in the Guangdong area was 1.46, and the sales sentiment was 2.01. On the first working day after the new year, the number of traders shipping goods in the market increased, but many downstream enterprises were still in a pre-operation state. Combined with the rise in the zinc price center yesterday, spot trades were sluggish, and premiums and discounts declined.

Tianjin: Yesterday, the purchasing sentiment for refined zinc in the Tianjin area was 1.55, and the shipment sentiment was 1.75. Yesterday, zinc prices mainly fluctuated, most downstream enterprises had not resumed work, and some traders were still on holiday. The market was relatively sluggish, with overall transactions being few.

Ningbo: On the first trading day after the holiday, traders in the Ningbo market showed strong sentiment to hold prices firm. Spot premiums increased compared to pre-holiday levels. However, as most downstream enterprises are scheduled to resume work after the month-end or the Lantern Festival, downstream inquiries were few yesterday, and overall spot trades were sluggish.

Social Inventory: On February 23, LME zinc inventory decreased by 300 mt to 101,250 mt, a decrease of 0.3%. According to SMM communication and understanding, as of February 24, domestic inventory increased.

Zinc Price Forecast: Overnight, the LME zinc contract recorded a bullish candlestick, with support provided by the middle Bollinger Band. Recently, uncertainty surrounding Trump's tariff plan has persisted, leading the market to largely adopt a wait-and-see approach regarding subsequent developments. However, with the conclusion of the Chinese New Year holiday, the resumption of domestic trading has boosted market confidence. Base metals generally rose, and the center of LME zinc prices edged up slightly. Overnight, the SHFE zinc contract recorded a bearish candlestick, with support from the 5- and 10-day daily averages below. During the Chinese New Year holiday, domestic zinc ingot inventory accumulated significantly to over 200,000 mt. Additionally, domestic downstream zinc enterprises have not fully resumed operations, resulting in relatively weak fundamental support for zinc prices. In the night session, SHFE zinc pulled back.

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, and are for reference only, not constituting decision-making advice.