Futures Market: Overnight, LME zinc opened at $2,863/mt. At the beginning of the session, a tug-of-war between longs and shorts caused LME zinc to fluctuate rangebound around the daily moving average. During European trading hours, increased long positions pushed LME zinc to a high of $2,905/mt, but later, increased short positions drove the center of LME zinc down to around $2,865/mt. It eventually closed lower at $2,861/mt, down $1.5/mt or 0.05%. Trading volume decreased to 10,178 lots, while open interest increased by 636 lots to 219,000 lots. Overnight, LME zinc recorded a long upper shadow bearish candlestick, with resistance formed by various moving averages above. Meanwhile, the most-traded SHFE zinc 2502 contract opened higher at 24,355 yuan/mt. Early in the session, reduced long positions led SHFE zinc to decline along the daily moving average, hitting a low of 24,075 yuan/mt. Subsequently, increased long positions resulted in a "V"-shaped rebound, with the center fluctuating along the daily moving average. It eventually closed lower at 24,175 yuan/mt, down 65 yuan/mt or 0.27%. Trading volume decreased to 50,963 lots, and open interest fell by 37 lots to 96,149 lots. Overnight, SHFE zinc recorded a bearish candlestick with no upper shadow, with resistance formed by the 10-day moving average above.
Macro: The US tightened controls on the global flow of AI chips; China's Ministry of Commerce stated it would take necessary measures to firmly safeguard its legitimate rights and interests; a breakthrough was achieved in mediating a ceasefire in Gaza, with the final draft agreement provided to Israel and Hamas; Los Angeles entered a state of high alert as extreme winds returned, potentially hindering firefighting efforts. The US imposed stricter sanctions on Russian oil exports, while China and India sought new supplies.
Spot Market:
Shanghai: Spot premiums were around 180–200 yuan/mt against the average price. Domestic zinc ingots under long-term contracts continued to arrive in the Shanghai market. Yesterday, many traders were active in selling, but downstream enterprises have gradually started their holidays, leading to a decline in raw material purchase demand. With sluggish transactions among traders, spot premiums fell significantly, and overall market transactions were average.
Guangdong: Spot premiums were 80 yuan/mt against Shanghai. Overall, downstream enterprises in Guangdong are expected to enter the holiday phase soon, resulting in sluggish market transactions. Yesterday, the price spread between futures contracts narrowed, and zinc prices rose. Traders adjusted prices to sell, leading to a decline in premiums.
Tianjin: Tianjin spot prices were at a discount of 100 yuan/mt against Shanghai. Futures prices continued to rebound, but downstream buyers were cautious due to high prices, focusing on just-in-time procurement or long-term contracts. Additionally, most enterprises are gradually entering the holiday phase, leading to a significant decline in downstream consumption and low purchase willingness. Some traders were eager to sell, resulting in scattered quotations. Overall market transactions were average.
Ningbo: Spot premiums were 80 yuan/mt against Shanghai. Over the weekend, Kirin zinc ingots arrived in the Ningbo market. However, as some downstream enterprises have started their holidays, purchase willingness weakened. Traders continued to lower spot premium quotations, and yesterday's market transactions were still primarily driven by just-in-time procurement from downstream buyers.
Social Inventory: On January 13, LME zinc inventory decreased by 3,450 mt to 210,625 mt, a drop of 1.61%. As of January 13, SMM's total zinc ingot inventory across seven regions stood at 61,000 mt, down 700 mt from January 6 but up 3,000 mt from January 9, indicating a buildup in domestic inventory.
Zinc Price Forecast: A stronger US dollar exerted pressure on zinc prices. However, a fire at Australia's Perilya lead-zinc mine caused supply disruptions, with the impact yet to be estimated. Supply-side disturbances persist, limiting the downside for zinc prices. Overnight, domestic and international zinc prices fell in tandem. As downstream enterprises gradually enter their holiday phase, SMM social inventory also increased by 3,000 mt. Zinc prices are expected to fluctuate downward.
![Zinco de Tianjin: Preços do zinco se recuperam, downstream permanece cauteloso [Comentário do meio-dia da SMM]](https://imgqn.smm.cn/usercenter/tAyyp20251217171754.jpg)
![Zinco em Guangdong: Centro de futuros sobe, mercado à vista permanece calmo [comentário do meio-dia da SMM]](https://imgqn.smm.cn/usercenter/XrnKf20251217171755.jpg)
