Last Friday, the US dollar fell, and LME zinc rose sharply [SMM Morning Meeting Summary]

Zinc Morning Meeting Minutes for September 21

Futures: Last Friday, LME zinc opened at $3,880/mt. In early trading, LME zinc quickly dipped to $3,873/mt before consolidating around the daily average. During European trading hours, bulls added positions, pushing LME zinc sharply higher. Entering the night session, LME zinc consolidated at highs, and in late trading it surged to touch $3,947/mt, finally closing at $3,940.5/mt, up $59/mt, or 1.52%. Trading volume fell to 12,532 lots, and open interest decreased by 832 lots to 261,000 lots. Last Friday, the SHFE zinc 2611 contract opened at 26,675 yuan/mt. In early trading, SHFE zinc briefly touched a high of 26,760 yuan/mt before pulling back under pressure. Prices then continued to move lower, dipping to 26,590 yuan/mt before bulls added positions, pushing SHFE zinc to drift higher. In late trading, it consolidated at highs and finally closed at 26,745 yuan/mt, up 180 yuan/mt, or 0.68%. Trading volume fell to 51,652 lots, and open interest increased by 4,133 lots to 134,000 lots.

Macro: US media: Trump said he is "making a decision" on the Iran issue and may be willing to meet with the Iranian president; Iran's military: any US attack will trigger retaliation from Iran; the Houthis said Saudi Arabia's escalation will be met with a stronger counterattack; Ghalibaf: the Strait of Hormuz will remain closed until Iran's conditions are met; Turkey said it may provide assistance to Saudi Arabia; China-US economic and trade consultations began in New York, US.

Spot market:

Shanghai: Refined zinc buying sentiment in Shanghai was 1.96, and selling sentiment was 2.60. Last Friday, more traders sold in the Shanghai market. Coupled with a rebound in zinc futures prices, downstream enterprises were less willing to buy, and overall spot trades weakened MoM. Spot premiums changed little, and most trading occurred among traders.

Guangdong: Refined zinc buying sentiment in Guangdong was 1.85, and selling sentiment was 2.62. As zinc prices continued to rise, spot trading in Guangdong weakened. Although traders' quotes remained firm last Friday, high prices to some extent dampened downstream buying interest, and market trading turned quieter.

Tianjin: Refined zinc buying sentiment in Tianjin was 1.91, and selling sentiment was 2.44. Futures rallied, and downstream enterprises had largely completed earlier stockpiling, so inquiries were limited. Spot supply in circulation decreased, and traders held prices firm, with spot premiums edging up. Overall market trading was relatively poor.

Ningbo: Traders' quotes remained firm. Last Friday, overall spot premiums edged up, but as zinc futures prices rebounded MoM and dip-buying earlier this week was relatively weak, downstream buying interest weakened, and overall spot trades were mediocre.

Social inventory: On September 17, LME zinc inventory increased by 1,050 mt to 115,300 mt, up 0.92%. According to SMM communication, as of September 17, domestic inventory decreased by 9,000 mt to 213,500 mt.

Zinc price forecast: Last Friday, LME zinc recorded a large bullish candlestick, with the daily candlestick center moving significantly higher, the KDJ gap expanding upward, and the lower Bollinger Bands midline providing support. Last Friday, bears reduced positions and exited, the US dollar declined and nonferrous metals broadly rose. Although LME zinc inventory increased, the overall inventory level was not high. Combined with lingering supply concerns from the South Korean smelter accident, zinc prices fluctuated at highs. Last Friday, SHFE zinc recorded a small bullish candlestick, with the daily candlestick center moving slightly higher and the lower Bollinger Bands midline providing support. Last Friday, supported by bulls adding positions, zinc prices drifted higher. China's zinc ingot exports, combined with increased stockpiling ahead of the upcoming dual holidays, pushed social inventory down to 213,000 mt. Coupled with low TCs, zinc prices have strong bottom support.

Data source statement: Except for public information, all 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.