Long and Short Funds Stalemate, Zinc Prices Fluctuate at Highs [SMM Analysis]

SMM, December 27:

This week, zinc prices rebounded from lows. On the macro side, domestic economic meetings continued to signal expectations of accommodative fiscal and monetary policies, improving market sentiment and driving zinc prices upward. On the fundamentals side, domestic inventory continued destocking to 65,000 mt, while SHFE registered warehouse warrants fell to around 1,500 mt. Tightness in the spot market intensified bullish sentiment, with open interest rising again to nearly 300,000 lots, indicating strong capital favor. Although the execution of new long-term contracts and the arrival of imported zinc ingots have rapidly narrowed the high spot premium, and the trade market showed a strong "front-running" mentality, the likelihood of a significant increase in bearish capital remains low before social inventory accumulates. Meanwhile, with the increased circulation of zinc concentrate in the market, monthly TC rose by 300 yuan/mt (metal content) to 1,900 yuan/mt (metal content). With supply-side issues easing, the room for further zinc price increases is also limited. Bullish and bearish funds are in a stalemate, and zinc prices are expected to fluctuate at highs.

The model predicts that the price range for SMM 0# zinc ingot - average price from this Friday to next Thursday (2025-01-02) will be [24,275, 26,265], with a price center of 25,450 yuan/mt. The extreme price range is [23,680, 26,860], the normal price range is [24,080, 26,460], and the conservative price range is [24,470, 26,070]. Next week's price trend is expected to jump initially and then pull back or fluctuate upward. The support range is [24,080, 24,470], and the resistance range is [26,070, 26,460].

(The above information is based on market data collection and comprehensive evaluation by the SMM research team. The information provided herein is for reference only and does not constitute direct investment research advice. Clients should make prudent decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.)

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