Zinc Morning Meeting Minutes for July 22
Futures: Overnight, LME zinc opened at $3,518.5/mt, quickly dipped to $3,509.5/mt at the start, then rose along the daily moving average, hitting a high of $3,577.5/mt during European trading hours. Entering the night session, bulls took profits and exited, causing LME zinc's center to shift lower and consolidate around the daily moving average. It eventually closed up at $3,548/mt, up $33/mt, an increase of 0.94%. Trading volume increased to 9,803 lots, and open interest decreased by 1,999 lots to 250,000 lots. Overnight, the most-traded SHFE zinc 2609 contract opened at 24,515 yuan/mt, dipped to 24,430 yuan/mt in early trading, then was pushed higher by long positions to consolidate around 24,530 yuan/mt, touching a high of 24,560 yuan/mt during the session. It finally closed up at 24,535 yuan/mt, up 135 yuan/mt, or 0.55%. Trading volume decreased to 38,638 lots, and open interest increased by 165 lots to 96,111 lots.
Macro: Trump: Iran wants to meet, but we are not interested; will strike Iran's Khuzestan region very hard; Iranian military: If the US attacks Iran's nuclear facilities, all US and allied interests in the region will become targets; Israeli media: The 10-day ceasefire proposal was initiated by the Iranian side, and Trump demands that Iran "pay a price"; Two oil tankers carrying Saudi crude oil turned around in the Red Sea and headed towards the Suez Canal; British media: Trump may impose new tariffs on dozens of countries as early as this week; Foreign Minister Wang Yi met with a delegation of the European Parliament’s Foreign Affairs Committee. The CSRC held a series of symposiums with listed companies, industry institutions, experts and scholars to hear their opinions and suggestions.
Spot Market:
Shanghai: In Shanghai, the procurement sentiment for refined zinc was 2.10 and shipments sentiment was 2.57. The SHFE zinc futures price continued to decline yesterday. Some downstream buyers made purchases at low prices, but others remained bearish, and overall transactions did not improve further. Meanwhile, shipments in the Shanghai market were limited, and some suppliers continued to raise spot premium quotations, driving premiums higher in the market.
Guangdong: In Guangdong, the procurement sentiment for refined zinc was 2.16 and sales sentiment was 2.49. The futures market moved sideways yesterday, with most transactions consisting of just-in-time procurement by enterprises. At the same time, spot circulation of certain brands in the Guangdong market remained relatively tight recently, leading spot premiums to gradually rise.
Tianjin: In Tianjin, the procurement sentiment for refined zinc was 1.94 and shipments sentiment was 2.51. The futures market continued to pull back yesterday. Downstream buyers remained on the sidelines, showing low purchasing interest. Traders held prices firm when selling, and premiums edged up slightly. Overall market transactions were poor yesterday.
Ningbo: Zinc futures prices fell day-on-day in the morning session. Yesterday, traders mostly continued to raise spot quotations, and overall premiums continued to increase. However, some downstream buyers remained bearish, and overall spot transactions were mediocre yesterday.
Social Inventory: On July 21, LME zinc inventory decreased by 650 mt to 108,500 mt, a decline of 0.6%; according to SMM communication, as of July 20, China’s inventory increased by 1,300 mt to 269,000 mt.
Zinc Price Outlook: Overnight, LME zinc recorded a bullish candlestick with a long upper shadow, with the 60-day moving average below providing support and the KDJ gap narrowing. Overnight, the Middle East conflict continued, shipping delays occurred, compounded by storms hitting central Chile. Although zinc ore deposits in Chile are limited, sentiment followed the rise in copper prices, shifting the center of zinc prices upward. Overnight, SHFE zinc recorded a small bullish candlestick, with the 5-day moving average below turning into support and the middle Bollinger Band above forming resistance. Driven by the LME market, the center of SHFE zinc edged up. Mine-side disruptions persist, but smelters have not yet made further production cuts amid profit support. During the consumption off-season, zinc prices encounter resistance above.
Data Source Statement: All data, except publicly available information, 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.
