Easing US-Iran tensions, LME zinc center shifted higher [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc opened at $3,464/mt, fluctuating along the daily average line early in the session and dipping to $3,442/mt. Entering the night session, bulls added positions, and LME zinc surged, reaching a high of $3,534/mt near the close. It ultimately settled at $3,525.5/mt, up $57/mt, or 1.64%. Trading volume declined to 14,639 lots, while open interest rose by 4,214 lots to 238,000 lots. Overnight, the most-traded SHFE zinc 2607 contract opened at 24,190 yuan/mt, briefly slipping to 24,020 yuan/mt before bears trimmed positions. SHFE zinc then fluctuated upward, touching a high of 24,305 yuan/mt near the close, and settled at 24,265 yuan/mt, up 100 yuan/mt, or 0.41%. Trading volume decreased to 60,028 lots, and open interest fell by 1,210 lots to 79,545 lots.
Macro: Trump: canceled tonight’s strike on Iran; the US-Iran agreement entered its final drafting stage and is expected to be signed in Europe this weekend. US media revealed behind-the-scenes negotiations: the three major disagreements have been narrowed under Qatar’s mediation. Iran’s Foreign Ministry: no final conclusion has been reached on the Iran-US agreement yet. US Treasury Secretary Bessent: if necessary, the US will draw funds from Iran’s accounts to compensate Gulf states for their losses. The ECB raised the three key interest rates by 25 basis points as expected. The CME plans to launch around-the-clock crude oil and gold contracts. The State Administration for Market Regulation, together with the Cyberspace Administration of China and the National Railway Administration, held talks with seven third-party platforms involved in train ticket sales.
Spot:
Shanghai: Refined zinc purchasing sentiment in Shanghai stood at 2.36, with shipment sentiment at 2.77. In the morning, zinc futures fell sharply below 24,500 yuan/mt. Traders actively quoted and sold cargoes, driving spot premiums for zinc ingots higher. Downstream enterprises also actively placed purchases starting from the previous night, leading to an overall improvement in spot trades.
Guangdong: Refined zinc purchasing sentiment in Guangdong stood at 2.3, with selling sentiment at 2.5. Zinc price centers shifted notably lower yesterday. End-user shipments improved, purchasing enthusiasm picked up, and the number of market price-fixing deals increased, with spot premiums edging up.
Tianjin: Refined zinc purchasing sentiment in Tianjin stood at 2.21, with shipment sentiment at 2.65. Zinc prices pulled back sharply to levels more acceptable to downstream players, who began placing price-fixing purchases as early as the previous night. After the morning futures pullback, large volumes of continued price-fixing deals were struck, with considerable trading around 24,200 yuan/mt. Traders’ shipment premiums accordingly rose, and overall market transactions were solid.
Ningbo: Traders adopted a relaxed approach to quoting and selling. Overall premium quotations showed some divergence, but with zinc futures moving sideways, downstream zinc alloy plants remained on the sidelines, and spot transactions were lackluster.
Inventories: On June 11, LME zinc inventory decreased by 100 mt to 109,475 mt, a decline of 0.09%; according to SMM’s market communication, as of June 11, China’s inventory fell by 1,100 mt to 264,600 mt.
Zinc price forecast: Overnight, LME zinc formed a large bullish candlestick, with the 10- and 20-day moving averages exerting resistance above. US-Iran tensions eased somewhat. The US dollar index rose first then fell, base metals broadly gained, and LME zinc’s center moved higher. It is expected to trade in a rangebound pattern today. Overnight, SHFE zinc formed a small bullish candlestick with a long lower shadow. Geopolitical developments led to improved market sentiment and capital inflows. Domestically, the tight ore and loose ingot supply pattern remained unchanged, with no notable contradiction in fundamentals. Driven by the LME, SHFE zinc’s center shifted higher. SHFE zinc is expected to fluctuate within a range today.

Data source statement: Except for publicly available information, all other data are processed by SMM based on public information, market communication, and SMM’s internal database models. They are for reference only and do not constitute decision-making advice.