US dollar index remains firm, LME zinc records a bearish candlestick with no upper shadow [SMM Morning Meeting Minutes]

Futures: Overnight, LME zinc opened at $3,897/mt and hit a high of $3,897/mt right at the open. The LME zinc price center then moved lower, dipping to $3,821/mt during the session. LME zinc subsequently consolidated and rebounded slightly, but pulled back again near the end of trading to close down at $3,851/mt, a decline of $42.5/mt or 1.09%. Trading volume increased to 15,753 lots, while open interest fell by 389 lots to 263,700 lots. Overnight, the most-traded SHFE zinc 2611 contract opened at 26,505 yuan/mt. In early trading, SHFE zinc quickly dipped to 26,415 yuan/mt. Bulls then added positions, pushing SHFE zinc up to a high of 26,660 yuan/mt. Some bulls then took profits and exited, causing SHFE zinc to pull back quickly below the daily average line. It closed down at 26,490 yuan/mt, a decline of 10 yuan/mt or 0.04%. Trading volume decreased to 59,620 lots, while open interest fell by 2,097 lots to 141,000 lots.

Macro: Mediators are reportedly set to hold separate talks with the US and Iran, focusing on a revised version of Iran's 7-day proposal. Trump said US media reports about "easing Iran sanctions and unfreezing funds" were false. Iran said Saudi media were hyping reports of nuclear concessions, calling them false. Ukraine expects no ceasefire in the Black Sea region in the coming months. Nvidia added $150 billion in stock buyback authorization, bringing the total to $235 billion. The People's Bank of China and seven other departments jointly issued the "Guidance on Financial Support for Expanding Capacity and Improving Quality in the Service Sector."

Spot:

Shanghai: Refined zinc purchasing sentiment in Shanghai was 2.0, while selling sentiment was 2.49. In the morning, zinc futures prices fell MoM, and traders showed some willingness to hold prices firm. Spot quotes rose yesterday, but downstream enterprises had largely completed pre-holiday stockpiling, so most stayed on the sidelines yesterday. Overall spot trades were average.

Guangdong: Refined zinc purchasing sentiment in Guangdong was 1.85, while selling sentiment was 2.62. After returning from the Mid-Autumn Festival holiday, the zinc price center pulled back slightly. Some end-users in Guangdong still engaged in pre-National Day stockpiling, but some end-users were also on holiday. Overall market transactions were relatively ordinary. Quotes for mainstream brands remained firm, but traders faced sluggish shipments, and spot premiums held steady.

Tianjin: Refined zinc purchasing sentiment in Tianjin was 1.71, while selling sentiment was 2.21. Futures consolidated. Most downstream enterprises had already completed holiday stockpiling, so inquiries were limited. With the holiday approaching, traders were not active in selling, premiums held steady, and overall market trading sentiment was weak.

Ningbo: In the last trading week before the National Day holiday, downstream enterprises had largely completed earlier stockpiling and mostly stayed on the sidelines yesterday. Overall spot trades were average, with traders selling casually and spot premiums showing limited gains.

Inventory: On September 28, LME zinc inventory increased by 1,875 mt to 123,475 mt, up 1.54%. According to SMM, as of September 28, domestic inventory continued to decline to around 203,000 mt.

Zinc price forecast: Overnight, LME zinc recorded a bearish candlestick, with prices pulling back below the middle Bollinger Band. The recent rise in oil prices has reignited inflation concerns, while US Fed officials have maintained a hawkish stance, keeping the US dollar index relatively firm and exerting some pressure on zinc prices. Overnight, SHFE zinc recorded a small bearish candlestick, with the middle Bollinger Band above exerting pressure on prices. End-use consumption remained mediocre, and downstream holidays during the dual festivals lengthened, but low TCs combined with the sustained LME Cash-3M backwardation structure kept SHFE zinc consolidating at highs.

Data source statement: All data other than public information are processed by SMM based on public information, market communication, and SMM's internal database models, and are for reference only, not constituting decision-making advice.