LME Zinc Inventory Significantly Rose, LME Zinc Price Center Shifted Downward [SMM Zinc Morning Meeting Summary]

SMM Zinc Morning Meeting Minutes for June 17

Futures: Overnight, LME zinc opened at $3,579.5/mt, briefly rising to a high of $3,599/mt at the start, then retreated from highs and fell all the way. During the session, LME zinc dipped to $3,539/mt, then rebounded slightly to around the daily average line and fluctuated, finally closing down at $3,561.5/mt, down $23/mt, or 0.64%. Trading volume decreased to 10,367 lots, while open interest rose by 3,639 lots to 250,000 lots. Overnight, the most-traded SHFE zinc 2608 contract opened at 24,735 yuan/mt, fluctuated around the daily average line after opening, hitting a high of 24,780 yuan/mt early and a low of 24,665 yuan/mt during the session, and finally settled down at 24,715 yuan/mt, down 50 yuan/mt, or 0.2%. Trading volume decreased to 28,280 lots, while open interest increased by 3,340 lots to 83,970 lots.

Macro: World Gold Council: More central banks plan to increase gold holdings. The Bank of Japan raised interest rates to the highest level in 31 years. Trump says US-Iran deal negotiations enter second phase. It is reported that Iran can export oil immediately after the US-Iran deal is signed. Market maker cash bond trading settlement service fee reduced to 75% off. Zhongji Innolight plans to list in Hong Kong as early as mid-July.

Spot Markets:

Shanghai: Yesterday, Shanghai refined zinc purchase sentiment was 1.92 and sales sentiment was 2.57. In the Shanghai market, traders actively sold, but with futures zinc prices fluctuating at highs, downstream zinc enterprises were mostly on the sidelines, spot purchases were basically on demand, and overall spot trades performed mediocrely, with no improvement from the previous day.

Guangdong: Yesterday, Guangdong refined zinc purchase sentiment was 1.85 and sales sentiment was 2.60. Guangdong underwent contract rollover yesterday. Current prices remained high, cooling downstream purchase willingness, while end-use demand was mediocre. At the same time, downstream factories had sufficient inventory themselves, further leading to sluggish market trades.

Tianjin: Yesterday, Tianjin refined zinc purchase sentiment was 2.01 and sales sentiment was 2.56. With zinc prices fluctuating at highs and not yet reaching downstream psychological price levels, downstream procurement enthusiasm was low, traders' selling premiums were basically stable, and overall market transactions were mediocre.

Ningbo: There were many traders selling in the Ningbo market, and overall spot quotations were basically stable compared with the previous day. However, with futures zinc prices remaining high yesterday and Ningbo zinc downstream orders being mediocre in the off-season, inquiry and purchase willingness was poor, leaving overall spot trades sluggish.

Social Inventory: On June 16, LME zinc inventory rose by 17,400 mt to 124,550 mt, an increase of 16.24%. According to SMM communication, as of June 15, domestic inventory edged up slightly.

Zinc Price Outlook: Overnight, LME zinc recorded a bearish candlestick, piercing through several daily moving averages. Ahead of the US Fed's decision, the market's wait-and-see sentiment was thick, but LME zinc ingot inventory rose significantly to over 120,000 mt, weighing on zinc prices. LME zinc fluctuated lower, with its center shifting downward. Overnight, SHFE zinc recorded a bearish candlestick, with the middle Bollinger Band forming resistance. Affected by LME trends, the center of SHFE zinc's night session shifted lower. However, from the fundamentals side, the tight ore supply situation has not improved, and zinc concentrate TCs continued their downward trend, still providing some support to zinc prices. It is expected that SHFE zinc will maintain a fluctuating trend in the short term.

Data Source Statement: All data other than publicly available information are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only and do not constitute any decision-making advice.