U.S.-Iran Tensions Fluctuate, LME Zinc Center of Gravity Shifts Downward [SMM Morning Meeting Minutes]

Futures: Overnight, LME zinc opened at $3,310/mt. At the beginning of the session, LME zinc fluctuated upward and touched a high of $3,343.5/mt during European trading hours. Subsequently, bears increased their open interest, and the center of LME zinc shifted downward, touching a low of $3,295/mt during the night session. The center then lifted, and LME zinc eventually closed down at $3,323/mt, down $12/mt, a decline of 0.36%. Trading volume increased to 9,399 lots, and open interest increased by 4,520 lots to 217,000 lots. Overnight, the most-traded SHFE zinc 2605 contract opened at 23,500 yuan/mt. At the beginning of the session, it briefly dipped to a low of 23,475 yuan/mt. Subsequently, bulls increased their open interest, and SHFE zinc quickly rallied to touch a high of 23,740 yuan/mt. The center then shifted slightly lower, and it eventually closed up at 23,710 yuan/mt, up 135 yuan/mt, a gain of 0.57%. Trading volume decreased to 39,077 lots, and open interest increased by 288 lots to 74,664 lots.

Macro:

Vance said substantial progress had been made in negotiations with Iran, and the second round of talks depends on Iran; Russian media: the next round of US-Iran talks may be held in Islamabad on the 16th; Trump: will not accept any deal that allows Iran to possess nuclear weapons; Maersk raised shipping rates; a polysilicon insider said: "the rumor that leading companies held a closed-door meeting in Chengdu to discuss production cuts and hold prices firm" is false; the outstanding aggregate social financing at the end of March was up 7.9% YoY.

Spot market:

Shanghai: The purchasing sentiment for refined zinc in the Shanghai region was 2.2, and the shipments sentiment was 2.72. Zinc futures prices were lower WoW in the morning session. Traders took the opportunity to raise spot quotes. Spot premiums rose WoW. Downstream enterprises increased inquiries and purchases, and spot market transactions improved yesterday.

Guangdong: The purchasing sentiment for refined zinc in the Guangdong region was 1.94, and the sales sentiment was 2.87. Yesterday, the center of zinc prices moved lower. Trading among traders improved somewhat, but current prices had not fully reached the psychological price level of downstream enterprises. Purchasing enthusiasm among enterprises remained relatively lackluster, and overall spot market transactions were ordinary.

Tianjin: The purchasing sentiment for refined zinc in the Tianjin region was 1.93, and the shipments sentiment was 2.55. Zinc prices fell in the early session. Some downstream enterprises took advantage of the dip to restock and place orders, and transactions improved. Later, zinc prices rebounded, and transactions weakened. Traders continued to ship at significant discounts. Overall market transactions improved compared to last Friday.

Ningbo: Traders in the Ningbo market actively offered shipments quotes. Some traders raised spot quotes. Futures were in the doldrums in the morning session. Some downstream enterprises took advantage of the dip to place orders and purchase. Inquiries increased yesterday, and spot market transactions improved somewhat.

Social inventory: On April 10, LME zinc inventory decreased by 150 mt to 111,775 mt, a decline of 0.13%. According to SMM's communications, as of April 13, China's inventory increased.

Zinc Price Forecast: LME zinc posted a small bullish candlestick overnight. The US responded to the collapse of weekend peace negotiations by blockading Iranian ports, triggering market concerns. LME zinc came under slight pressure and is expected to trade in a range-bound pattern today. SHFE zinc posted a large bullish candlestick overnight. Affected by the US-Iran tensions, China's zinc prices saw a slight recovery from previous trends, but fundamentals continued to weigh on zinc price movements. SHFE zinc is expected to trade in a range-bound pattern today.

Data Source Disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM. It is for reference only and does not constitute decision-making advice.