LME Zinc Ingot Inventory Continues to Destock, LME Zinc Slightly Rebounds [SMM Zinc Morning Meeting Summary]

SMM Zinc Morning Briefing, July 17

Futures: Overnight, LME zinc opened at $3,552.5/mt and drifted higher throughout the session, dipping to a low of $3,548.5/mt early before touching a high of $3,596/mt near the end, ultimately closing up $29.5/mt, or 0.83%, at $3,581/mt. Trading volume fell to 9,049 lots, while open interest rose by 548 lots to 255,000 lots. Overnight, the most-traded SHFE zinc 2609 contract opened at 24,645 yuan/mt and similarly rose throughout the session, dipping to a low of 24,590 yuan/mt early before touching a high of 24,815 yuan/mt near the end, finally settling up 65 yuan/mt, or 0.26%, at 24,765 yuan/mt. Trading volume fell to 32,753 lots, and open interest increased by 1,667 lots to 92,973 lots.

Macro: Iran secretly ordered the Houthis to blockade the Bab el-Mandeb Strait if the US strikes its power facilities; the White House said Iran is still in talks with the US and expressed a desire to reach an agreement; Iranian media reported that US forces attacked some airports, railway hubs, and bridges within Iran. US retail sales saw mild growth in June, and initial jobless claims last week hit a new low since the week of May 2, 2026; FOMC 2026 voting member Lorie Logan stated that a moderate rate hike now will help better balance the outlook and risks; South Korea has suspended the launch of new leveraged individual stock ETFs and tripled margin requirements; Trump Media & Technology Group will launch a paid service offering faster access to Trump's social media posts.

Spot Market:

Shanghai: Refined zinc purchase willingness in the Shanghai region yesterday was 2.04, while selling sentiment was 2.54. SHFE zinc futures prices fell MoM yesterday but did not reach downstream enterprises' psychological price level. Downstream enterprises conducted few orders yesterday, and overall spot purchases remained on an as-needed basis. However, suppliers in the trading market held prices firm strongly, and spot quotes continued to rise from the previous day. Overall trading yesterday remained largely among traders.

Guangdong: Refined zinc purchase willingness in the Guangdong region yesterday was 1.98, and sales sentiment was 2.55. Quotes in Guangdong rolled over to the SHFE 2609 contract yesterday. Although the center of futures prices pulled back somewhat, overall end-use demand remained sluggish. Some downstream enterprises had relatively ample inventory, leading to weak purchase willingness. The market mainly destocked its own inventory, and premiums consolidated at lows.

Tianjin: Refined zinc purchase willingness in the Tianjin region yesterday was 1.81, and selling sentiment was 2.53. Futures prices pulled back slightly yesterday. Overall consumption was very weak, with downstream enterprises primarily restocking to meet rigid demand. Premiums offered by traders for shipments remained stable. The export window was closed, which cooled market purchase sentiment, and overall market transactions were poor yesterday.

Ningbo: SHFE zinc futures prices declined yesterday morning, and some traders raised their spot offers. However, as futures prices had not fallen to downstream enterprises' psychological level, inquiries and purchases today remained on an as-needed basis, with no significant improvement seen in spot transactions.

Social Inventory: LME zinc inventory dropped by 575 mt to 111,875 mt on July 15, a decrease of 0.51; according to SMM communication, as of July 16, domestic inventory slightly decreased.

Zinc Price Forecast: Overnight, LME zinc recorded a bullish candlestick, with the 40-day moving average below providing support. On the macro front, geopolitical conflicts outside China persist, but on the fundamentals side, LME zinc ingot inventory continued to destock, coupled with the unchanged tight supply of imported ore, overall LME zinc rebounded slightly from low levels and is expected to maintain fluctuating trend in the short term. Overnight, SHFE zinc recorded a bullish candlestick, with the 40-day moving average below providing support. The LME rebound drove the domestic night session to recover from low levels. On the fundamentals side, SMM zinc ingot inventory slightly destocked on a MoM basis, and SHFE zinc is expected to maintain a sideways consolidation pattern overall.

Data Source Statement: All data other than public information are derived from public information, market communications, and SMM's internal database models, processed by SMM, for reference only and do not constitute any investment advice.