Futures: Overnight, LME zinc opened at $3,569.5/mt. At the beginning of the session, LME zinc attempted to rise above the daily moving average but was resisted and pulled back to a low of $3,555/mt. Subsequently, LME zinc consolidated and shot up to a high of $3,594/mt. Entering the night session, LME zinc fluctuated lower to near the daily moving average and ended up at $3,573/mt, up $5.5/mt or 0.15%. Trading volume decreased to 7,361 lots, and open interest fell by 4,171 lots to 246,900 lots. Overnight, SHFE zinc 2609 contract opened at 24,750 yuan/mt. At the beginning, it shot up to a high of 24,760 yuan/mt. Subsequently, with bulls reducing positions, the price fluctuated and fell back to a low of 24,655 yuan/mt. At the end of the session, bears reduced positions and the price slightly rebounded, moving sideways. It finally closed down at 24,690 yuan/mt, down 75 yuan/mt or 0.30%. Trading volume decreased to 34,929 lots, and open interest fell by 1,850 lots to 103,000 lots.
Macro: The US Fed continued to stay on hold, but three voting members supported a rate hike; US Republicans plan to raise the debt ceiling again; South Korea’s finance ministry announced it will restrict leveraged trading; Trump said he will strike Iran in response to attacks on US troops stationed in the Middle East; Iraq’s Hezbollah Brigades vowed to respond to joint strikes by the US and Saudi Arabia; Houthi militants are reportedly considering imposing fees on ships passing through the Red Sea; GigaDevice’s leader announced a plan to increase holdings.
Spot:
Shanghai: Yesterday, the purchase sentiment for refined zinc in Shanghai was 1.96, and the shipment sentiment was 2.58. SHFE zinc futures consolidated at highs yesterday. Downstream enterprises, with poor orders in the off-season, continued to purchase on an as-needed basis. Spot transactions saw no improvement. However, the zinc ingot export window has been continuously open recently, and some traders in the market had sentiment to hold prices firm, leading to some spot offers being raised.
Guangdong: Yesterday, the purchase sentiment for refined zinc in Guangdong was 1.92, and the sales sentiment was 2.50. Zinc prices fluctuated at highs, and downstream enterprises mostly purchased for rigid demand. Market trading activity was subdued, and spot premiums lacked upward momentum, maintaining a fluctuating trend.
Tianjin: Yesterday, the purchase sentiment for refined zinc in Tianjin was 1.91, and the shipment sentiment was 2.49. Futures continued to consolidate at highs. Amid weak consumption, downstream users were cautious of high prices and mainly consumed inventories. Traders kept their offering premiums largely stable. Overall market transactions were mediocre yesterday.
Ningbo: Traders in Ningbo mostly held prices firm yesterday, with spot premium offers up MoM. However, orders at downstream enterprises in Ningbo showed no improvement, with inquiries and purchases largely on an as-needed basis, while overall transactions were mediocre.
Inventory: LME zinc inventory decreased by 700 mt to 101,800 mt on July 29, down 0.68%. According to SMM, as of July 28, domestic inventory fell by 1,400 mt to 269,000 mt.
Zinc Price Forecast: Overnight LME zinc recorded a bullish candlestick with a long upper shadow, with the 40-day and 60-day moving averages below providing support. Trump said he would strike Iran in response to attacks on US troops in the Middle East, and the regional situation remains risky, but the US Fed announced it would keep interest rates unchanged, coupled with LME zinc inventory continuing to decline, the LME zinc center moved higher. Overnight SHFE zinc recorded a bearish candlestick, with the 5-day moving average above exerting pressure and the 40-day moving average below providing support. China's zinc concentrate TCs remained in the doldrums and the US Fed kept interest rates unchanged, offering some support to zinc prices at lower levels, but domestic consumption is weak. Overall, SHFE zinc is expected to consolidate on a strong note in the near term.
Data Source Statement: All data other than publicly available information are processed by SMM based on publicly available information, market communication, and SMM's internal database models, for reference only and do not constitute investment advice.
