US Dollar Strengthens, Zinc Price Center Shifts Downward [SMM Morning Meeting Summary]

 Spot Fundamentals

Shanghai: In the early session, the market quoted spot premiums of 120-140 yuan/mt against the average price, with almost no follow-up quotes. In the second trading session, ordinary domestic brands were quoted at premiums of 480-500 yuan/mt against the 2501 contract, while high-end brands like Shuangyan had no quotes against the 2501 contract. SMC/KZ were quoted at premiums of 500 yuan/mt against the 2501 contract. Kirin zinc ingots are expected to arrive soon, with some traders pre-selling in advance. However, as year-end approaches, some traders are clearing inventory and closing accounts. Spot zinc in the Shanghai market remains tight, with traders maintaining a sentiment to stand firm on quotes. Spot premiums stayed high, while the futures market continued to decline compared to the previous day. Downstream enterprises made purchases at lower prices, and market arrivals remain a key focus.

Guangdong: In the first session, suppliers quoted premiums of 585-640 yuan/mt for Kirin, Mengzi, and Lan zinc. The tight spot supply situation eased slightly, though some traders maintained a sentiment to stand firm on quotes. In the second session, Kirin, Mengzi, and Lan zinc were quoted at premiums of 590-640 yuan/mt against the online price. Overall, the futures market showed a downward trend yesterday, with slight improvement in market transactions. Meanwhile, the price spread between futures contracts widened slightly, and spot premiums edged higher.

Tianjin: By midday close, Xinzi had no quotes against the 01 contract, Chihong was quoted at premiums of 500 yuan/mt against the 01 contract, Xikeng was quoted at premiums of 410-470 yuan/mt against the 01 contract, and Bailin had no quotes. High-end brand Zijin was quoted at premiums of 500-550 yuan/mt against the 12 contract. The futures market continued to pull back yesterday, but the shortage of goods in the market remained unresolved, with most transactions being pre-sales. Downstream purchases increased at lower prices, and premiums and discounts remained relatively firm. Overall, market transactions were moderate.

Ningbo: In the first session, SMC/KZ were quoted at delivered premiums of 450 yuan/mt against the 2501 contract. In the second session, traders' quotes remained unchanged from the previous session. Some traders in the Ningbo market have completed their long-term contract execution for the year and currently have no spot goods for sale. Market supply remains limited, with imported zinc ingots expected to arrive over the weekend. Some downstream enterprises made purchases to meet rigid demand at lower prices, but overall market activity remained sluggish.

Zinc Price Forecast for Today: Overnight, LME zinc recorded a three-day losing streak, with resistance from various moving averages above. LME inventory decreased by 1,700 mt to 260,400 mt, a drop of 0.65%, continuing its downward trend. The US dollar remained strong, and the market expects the US Fed to issue hawkish interest rate cut remarks, leading to a lower center for LME zinc. Overnight, SHFE zinc recorded a four-day losing streak, with support from the 40-day moving average below. SHFE zinc fluctuated downward overnight, with weakened supply-side support. Overall open interest decreased, and capital favorability declined. However, the spot market remained tight, limiting the extent of the decline to some degree.