Futures: Overnight, LME zinc opened at $3,820.5/mt. At the beginning of the session, LME zinc drifted lower to hit a low of $3,797.5/mt. During European trading hours, bulls increased positions and pushed prices up, with LME zinc shooting up to a high of $3,851.5/mt. In the evening, the futures gave back some gains from the high, and prices pulled back to consolidate near the daily moving average. Finally, it settled higher at $3,827/mt, up $4.5/mt, or 0.12%. Trading volume decreased to 13,055 lots, and open interest increased by 2,465 lots to 264,000 lots. Overnight, the most-traded SHFE zinc 2610 contract opened higher with a gap at 26,000 yuan/mt. At the beginning of the session, SHFE zinc quickly shot up to a high of 26,160 yuan/mt, then prices pulled back, dipping to 25,990 yuan/mt during the session. Thereafter, prices consolidated repeatedly below the daily moving average, finally settling higher at 26,005 yuan/mt, up 100 yuan/mt, or 0.39%. Trading volume decreased to 73,580 lots, and open interest increased by 4,627 lots to 149,000 lots.
Macro: The US Treasury announced an expansion of the scope of secondary sanctions; US Treasury Secretary Bessent stated any entity laundering money for Iran will be removed from the US dollar system; Pakistan Army Chief of Staff General Munir met with Iranian officials on Monday and pledged to continue diplomatic efforts; Trump said tariffs on Canadian automobiles, steel and other categories will be raised to 50% from January 1 next year; Bessent is reportedly eyeing the Treasury General Account with a size close to $1 trillion; The central bank will conduct overnight reverse repo operations from August 27 to September 1, with daily operations not exceeding 600 billion yuan.
Spot:
Shanghai: Yesterday, the purchase sentiment for refined zinc in Shanghai was 1.94, and the shipment sentiment was 2.67. In the morning, SHFE zinc futures prices rose MoM, and downstream enterprises' fear of high prices persisted. Coupled with no improvement in end-use consumption, factories mostly had some raw material inventory. Yesterday there were almost no inquiries or purchases, and overall spot trades were basically among traders.
Guangdong: Yesterday, the purchase sentiment for refined zinc in Guangdong was 1.75, and the sales sentiment was 2.52. Zinc prices moved higher, and market trading sentiment was sluggish. However, spot cargo of some delivery brands was relatively scarce, while Guangdong inventory continued to see a small destocking, still providing some support to spot premiums.
Tianjin: Yesterday, the purchase sentiment for refined zinc in Tianjin was 1.81, and the shipment sentiment was 2.51. Futures continued to rally. Downstream enterprises gradually picked up zinc ingots priced last week, with few inquiries and pricing. Traders' shipment premiums remained stable, and overall market transactions were average yesterday.
Ningbo: Over the weekend, long-term contract zinc ingots arrived one after another, and overall market supply remained ample. Zinc futures prices fluctuated at highs on the morning session. Downstream enterprises continued to wait and see due to fear of high prices. Traders took a casual approach to shipments and quotes, and spot premiums changed little, with overall trading being sluggish.
Inventory: LME zinc inventory increased by 125 mt to 93,250 mt on August 24, down 0.13%; according to SMM market communication, as of August 24, China inventory decreased by 2,100 mt to 268,300 mt.
Zinc Price Forecast: Overnight, LME zinc recorded a bullish candlestick, supported by all moving averages below. Outside China bulls kept strengthening, while the backwardation structure remained large. Although LME inventory increased, the magnitude was relatively small, and the overall inventory level remained low, driving LME zinc higher. Overnight, SHFE zinc recorded a long upper shadow bullish candlestick, supported by various short-term moving averages. The LME market drove the SHFE zinc daily candlestick higher, but under the influence of high prices, the spot market across China performed ordinarily. Inventory remained at a high level above 260,000 mt overall, still exerting some pressure on the upside. It is expected to consolidate at highs today.
Data Source Disclaimer: Except for public information, other data are processed by SMM based on public information, market communication, and SMM's internal database models, for reference only and do not constitute decision-making advice.
![LME led SHFE zinc daily candlestick to continue rising, it is expected that prices will continue to consolidate at highs [SMM zinc morning comment]](https://imgqn.smm.cn/usercenter/tAyyp20251217171754.jpg)
