Long and Short Factors Intertwined, LME Zinc Center Slightly Moves Downward [SMM Morning Meeting Summary]

Spot Fundamentals

Shanghai: In the early trading session, the market quoted premiums of 100–160 yuan/mt over the average price, with almost no follow-up quotations. In the second trading session, general domestic brands were quoted at premiums of 430–490 yuan/mt against the 2501 contract, Huize was quoted at a premium of 480 yuan/mt against the 2501 contract, while high-end brand Shuangyan had no quotations against the 2501 contract. Suppliers mainly focused on selling, but the futures market continued to fluctuate at highs, and spot cargoes from Guangdong continued to flow into east China. Downstream just-in-need purchases were observed, with overall transactions being average.

Tianjin: By midday close, Xinzi was quoted at premiums of 400–460 yuan/mt against the 01 contract, Chihong had no quotations against the 01 contract, Xikeng was quoted at premiums of 350–370 yuan/mt against the 01 contract, and Bailing had no quotations against the 01 contract. High-end brand Zijin was quoted at premiums of 490–510 yuan/mt against the 01 contract. Last Friday, the futures market pulled back slightly, but downstream raw material inventories were relatively sufficient, and arrivals improved. Traders lowered their quotations, while downstream buyers remained on the sidelines, resulting in average overall market transactions.

Guangdong: In the first session, suppliers quoted premiums of 540–550 yuan/mt for brands such as Qilin, Huize, Feilong, and Hualian. As year-end approaches, fewer traders are selling as they enter the account-closing phase. In the second session, Qilin and Hualian were quoted at premiums of 550–570 yuan/mt against the online price. Currently, last Friday's futures market saw a slight decline, and some traders reported improved transactions. However, as zinc prices continue to fluctuate at highs, overall market transactions remain average.

Ningbo: In the first session, Honglu-V was quoted at a premium of 510 yuan/mt against the 2501 contract. In the second session, traders' quotations remained unchanged from the first session. Last Friday, Honglu zinc ingots arrived in Ningbo, and some traders presold Yongchang zinc ingots scheduled for delivery next week. However, downstream enterprises continued to purchase Guangdong zinc ingots, and last Friday's overall purchasing inquiries were low. Transactions in the Ningbo market remained poor.

Zinc Price Forecast for Today: Last Friday, LME zinc recorded a small candlestick with a long lower shadow, with LME inventory decreasing by 4,450 mt to 244,500 mt, a drop of 1.79%. Expectations for US Fed interest rate cuts weakened, the US dollar strengthened, and base metals were pressured downward, with LME zinc's center also shifting lower. Zinc prices are expected to fluctuate today. Last Friday, SHFE zinc recorded a small bullish candlestick, with resistance at the 20-day moving average. The market remains mixed, with macro sentiment relatively bearish. However, fundamentals continue to provide support for SHFE zinc. Zinc prices are expected to consolidate today.