US Dollar Index Strengthened, LME Zinc Came Under Pressure and Edged Lower [SMM Zinc Morning Meeting Summary]

Zinc Morning Meeting Summary for March 25

Futures: Overnight, LME zinc opened at $3,095/mt. After the opening, LME zinc fluctuated downward along the daily average line throughout the session, hitting an intraday high of $3,097/mt and a late-session low of $3,027/mt, before closing down at $3,038.5/mt, a decline of $64.5/mt, or 2.08. Trading volume fell to 11,298 lots, while open interest increased by 1,768 lots to 208,000 lots. Overnight, the most-traded SHFE zinc 2605 contract opened at 22,875 yuan/mt. During the night session, SHFE zinc fluctuated above the daily average line, reaching an intraday high of 22,970 yuan/mt and a late-session low of 22,835 yuan/mt, before closing down at 22,880 yuan/mt, a decline of 95 yuan/mt, or 0.41. Trading volume fell to 40,787 lots, while open interest increased by 301 lots to 102,000 lots.

Macro: Poll: Trump’s approval rating fell to its lowest level since returning to the White House; US media: The US Department of Justice admitted it lacked evidence for its investigation into Powell; Turkey is considering deploying its $135 billion gold reserves to defend the lira; Israeli media: The US intends to seek a one-month ceasefire to discuss a 15-point agreement with Iran; Goldman Sachs maintained its overweight recommendation on Chinese equities (A-shares and Hong Kong stocks).

Spot Market:

Shanghai: Yesterday, refined zinc purchase willingness in Shanghai was 2.18, and shipment sentiment was 2.61. Zinc prices on the futures market rose somewhat, while downstream enterprises held a certain amount of raw material inventory. Wait-and-see sentiment was strong yesterday, overall spot transactions were average, there were relatively many traders making shipments, and spot premiums changed relatively little.

Guangdong: Yesterday, refined zinc purchase willingness in Guangdong was 2.12, and sales sentiment was 2.57. Yesterday, the center of zinc prices rose, and downstream purchasing enthusiasm in Guangdong declined. Affected by this, traders slightly lowered their quotations, and spot premiums were flat from the previous day.

Tianjin: Yesterday, refined zinc purchase willingness in Tianjin was 2.07, and shipment sentiment was 2.57. Yesterday, zinc prices surged sharply, downstream buyers were cautious about purchasing at high prices, and raw material inventory at downstream plants was also high. There were fewer inquiries yesterday, market trading was mainly among traders, traders’ shipment premiums continued to edge down, and overall market transactions worsened from the previous day.

Ningbo: Long-term contracts are about to end. At month-end, there were not many traders making shipments in the market. Futures fluctuated yesterday morning, downstream enterprises showed low purchase willingness, spot transactions delivered mediocre performance, and spot premiums remained stable.

Social Inventory: As of March 23, LME zinc inventory fell by 75 mt to 117,100 mt, down 0.06; according to SMM, China inventory had declined as of March 23.

Zinc Price Forecast: Overnight, LME zinc recorded a bearish candlestick, and the KDJ opening continued to widen. As the Middle East conflict persisted and the US dollar index strengthened again, zinc prices came under pressure and moved lower. LME zinc is expected to remain at low levels in the short term. Overnight, SHFE zinc recorded a small bullish candlestick, with the 5-day moving average above acting as resistance. Ongoing macro uncertainty continued to weigh on zinc prices. On the fundamentals side, zinc ingot inventory remained at a high level, and SHFE zinc moved in the doldrums, with the center edging slightly lower during the night session.

Data source statement: Except for publicly available information, all other data is processed and generated by SMM based on publicly available information, market communication, and SMM's internal database models, and is for reference only and does not constitute decision-making advice.