Overnight LME Zinc Recorded a Shaven Head Bearish Candlestick with Daily Candlestick Center Shifting Downward [SMM Morning Meeting Minutes]

Zinc Morning Meeting Minutes, April 29

Futures: Overnight, LME zinc opened at the intraday high of $3,400/mt. At the start of the session, bears increased open interest and pushed LME zinc down sharply, hitting a low of $3,352.5/mt during European trading hours before oscillating around the daily moving average. An attempt to break above failed, and the center drifted slightly lower toward the close, ultimately settling down at $3,359.5/mt, down $35.5/mt or 1.05%. Trading volume increased to 13,292 lots, and open interest increased by 2,950 lots to 234,000 lots. Overnight, the most-traded SHFE zinc 2606 contract opened at 23,865 yuan/mt, quickly dipping to a low of 23,765 yuan/mt at the start of the session before the center shifted up to oscillate near the daily moving average, ultimately settling down at 23,850 yuan/mt, down 95 yuan/mt or 0.4%. Trading volume decreased to 40,084 lots, and open interest decreased by 1,873 lots to 106,000 lots.

Macro: The US banned its individuals and entities from paying Strait of Hormuz transit fees to Iran. Sources said Iran was expected to submit a revised peace proposal soon. Trump stated that Iran wanted the US to reopen the Strait of Hormuz as soon as possible. The Iranian military said it did not consider the war to be over. The UAE announced its withdrawal from OPEC and the OPEC+ mechanism effective May 1. The Political Bureau of the CPC Central Committee held a meeting to analyze the current economic situation and economic work. China will implement zero tariffs on all African countries with diplomatic relations starting May 1, 2026. MIIT stated that it will launch the "AI + Software" special initiative, and promote computing power deployment and edge computing infrastructure development in an orderly manner.

Spot market:

Shanghai: Refined zinc procurement sentiment in Shanghai was 2.12, and shipments sentiment was 2.52. Zinc futures prices declined notably in the morning session, and downstream enterprises actively placed orders on dips. Overall spot transactions improved, and as traders willing to sell remained few in the market yesterday, spot premiums rose accordingly.

Guangdong: Refined zinc procurement sentiment in Guangdong was 2, and sales sentiment was 2.65. Zinc price center moved lower yesterday, and downstream enterprises began placing orders starting from last night. Spot procurement via pricing orders increased, market activity improved, and traders raised their offers. Combined with narrowing price spreads between futures contracts, spot premiums rose yesterday.

Tianjin: Refined zinc procurement sentiment in Tianjin was 2.02, and shipments sentiment was 2.41. Zinc prices broke lower yesterday, prompting timely pre-holiday stockpiling. Downstream enterprises placed significant restocking orders on dips, and traders slightly raised premiums accordingly. Overall market transactions improved compared to the previous day.

Ningbo: Few traders were offering shipments in the Ningbo market, and spot premiums remained firm. Zinc futures prices declined notably in the morning session, and downstream alloy plants actively placed orders on dips. Overall market trading activity improved.

Social inventory: On April 28, LME zinc inventory decreased by 2,800 mt to 98,225 mt, down 2.77%; according to SMM communication, as of April 27, China's inventory edged up by 300 mt to 260,200 mt.

Zinc price forecast: Overnight, LME zinc posted a shaven-head bearish candlestick, with the daily candlestick center shifting downward and the 5-day moving average forming resistance above. As uncertainties over the US-Iran conflict increased, triggering inflation concerns, the US dollar strengthened, and non-ferrous metals were generally in the doldrums. Bears increased positions, pushing down the LME zinc center, but low TCs and low LME inventory levels limited the downside. Overnight, SHFE zinc posted a small bearish candlestick, with KDJ diverging downward. Macro instability increased, and on the fundamentals side, poor consumption led to continued social inventory accumulation, weighing on zinc prices. However, after yesterday's decline, downstream purchase sentiment improved, coupled with low ore TCs, suggesting limited room for further downside in zinc prices.

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 for reference only and does not constitute decision-making advice.