Initial Jobless Claims Below Expectations, Zinc Prices May Maintain Fluctuating Trend [SMM Morning Meeting Summary]

Spot Fundamentals:

Shanghai: In the early session, the market quoted spot premiums of 150-170 yuan/mt over the average price, with few follow-up quotations. During the second trading session, ordinary domestic zinc ingots were quoted at premiums of 480-500 yuan/mt against the SHFE 2501 contract, Huize was quoted at a premium of 450 yuan/mt against the 2501 contract, while high-end brand Shuangyan had no quotations against the 2501 contract. Entering the new long-term contract cycle, some zinc ingot long-term contracts began quoting, but as many traders closed accounts at the year-end, coupled with the continued rise in the futures market, overall buying sentiment in the market was low. Suppliers focused on selling, leading to a decline in spot premiums.

Guangdong: In the first session, suppliers quoted premiums of 515-545 yuan/mt for Qilin, Huize, Feilong, and Lantian zinc. As zinc prices rose in the early session, traders lowered premiums to facilitate sales, though some downstream enterprises had already restocked at lower prices earlier. In the second session, ex-factory Qilin was quoted at a premium of 420 yuan/mt over the online price. Overall, some traders had already closed accounts recently, and with the futures market rising yesterday, downstream purchase willingness was low. Although the price spread between futures contracts increased slightly, spot premiums pulled back slightly, and overall market transactions were moderate.

Tianjin: By midday close, Xinzi was quoted at premiums of 480-500 yuan/mt against the 01 contract, Chihong at 500-560 yuan/mt, Xikeng at 430-450 yuan/mt, and Bailing had no quotations. High-end brand Zijin was quoted at premiums of 580-600 yuan/mt against the 01 contract. With the futures market maintaining high-level fluctuations, downstream purchasing enthusiasm was low, traders slightly lowered their quotations, and overall market transactions were poor.

Ningbo: In the first session, Yongchang was quoted at a premium of 410 yuan/mt against the SHFE 2501 contract. In the second session, traders' quotations remained unchanged from the previous session. At the year-end, many Ningbo traders closed accounts. Although the new long-term contract cycle began yesterday, no zinc ingot long-term contract arrivals were seen, and the Ningbo market remained without quotations. Further attention will be paid to subsequent market arrivals.

Inventory: According to the SMM survey, as of Thursday, December 26, total zinc ingot inventory across SMM's seven surveyed regions stood at 65,200 mt, down 17,000 mt from December 19 and down 4,900 mt from December 23, indicating a decline in domestic inventory. Shanghai inventory increased slightly as imported zinc ingots continued to flow in during the week, coupled with domestic zinc ingot long-term contract arrivals. Tianjin inventory decreased as warehouse arrivals in the region showed no improvement, and zinc ingot inventory continued to decline. Guangdong inventory also decreased due to limited warehouse arrivals and the continued transfer of spot cargo to the east China market. Overall, the combined inventory of the three regions fell by 5,000 mt, while the total inventory across the seven regions decreased by 4,900 mt.

Zinc Price Forecast for Today: Overnight, LME zinc was closed for the Christmas holiday. Initial US jobless claims last week were lower than expected, but the US dollar index remained near a two-year high. LME zinc is expected to maintain a fluctuating trend. Overnight, SHFE zinc recorded a bearish candlestick, with the upper Bollinger Band forming resistance and various moving averages providing support below. Although imported zinc ingots are gradually flowing into the domestic market, the current spot market remains relatively tight, which is expected to provide some support for zinc prices.