US Economic Data Exceeds Expectations, LME Zinc Center Slips [SMM Zinc Morning Meeting Summary]

Zinc Morning Meeting Summary on January 8

Futures Market: Overnight, LME zinc opened at $2,900.5/mt. After the opening, LME zinc gradually moved downward along the daily moving average, surged to a high of $2,918/mt during the midday session, then slightly declined to a low of $2,868/mt during the night session. Subsequently, it rebounded to hover near the daily moving average and closed at $2,879/mt, down $16/mt or 0.55%. Trading volume decreased to 11,693 lots, and open interest fell by 1,800 lots to 218,000 lots. Overnight, the most-traded SHFE zinc 2502 contract opened at 24,340 yuan/mt. At the beginning of the session, SHFE zinc slightly rose to a high of 24,420 yuan/mt, then fluctuated below the daily moving average, hitting a low of 24,285 yuan/mt. Near the session's end, it rebounded to hover near the daily moving average and closed at 24,320 yuan/mt, down 75 yuan/mt or 0.31%. Trading volume decreased to 59,408 lots, while open interest increased by 1,557 lots to 106,000 lots.

Macro: The US November JOLTs job openings data and December ISM Non-Manufacturing PMI exceeded expectations. Trump announced several surprising strategies. NVIDIA launched consumer-grade RTX 50-series GPUs and corresponding laptops based on the Blackwell architecture. A South Korean court reapproved the arrest warrant for Yoon Suk-yeol, with the validity period not disclosed. Xi Jinping issued important instructions regarding the 6.8-magnitude earthquake in Dingri County, Shigatse City, Tibet. The PBOC increased its gold holdings for the second consecutive month. He Lifeng held a video call with US Treasury Secretary Janet Yellen. The CPC Central Committee and the State Council issued opinions on deepening the reform and development of elderly care services.

Spot Market:

Shanghai: In the early session, the market quoted spot premiums of around 250 yuan/mt over the average price. Spot availability in Shanghai remained limited, with premiums staying at high levels. Some downstream enterprises replenished their raw material inventories with previously pre-sold imported zinc ingots. Downstream purchases were mainly on a need-only basis, and transactions showed no significant improvement.

Guangdong: Spot premiums were 80 yuan/mt over Shanghai. Overall, zinc prices declined, prompting downstream restocking at lower prices. However, spot availability remained limited, and overall transactions were moderate.

Tianjin: Tianjin spot prices were at a discount of 70 yuan/mt to Shanghai. Futures prices continued to pull back, and downstream restocking was mainly on a need-only basis. Some enterprises remained bearish on pre-holiday stockpiling, showing low purchasing enthusiasm. Traders lowered premiums for shipments, and overall market transactions were moderate.

Ningbo: Spot premiums were 100 yuan/mt over Shanghai. Few traders were active in Ningbo, and spot premiums remained high. Recently, some downstream enterprises began raw material stocking, and spot market transactions were moderate.

Social Inventory: On January 8, LME zinc inventory decreased by 4,625 mt to 224,525 mt, a drop of 2.02%. As of January 6, total zinc ingot inventory across seven regions monitored by SMM stood at 61,700 mt, down 800 mt from December 30 and 2,800 mt from January 2, with domestic inventory recording a decline.

Zinc Price Forecast: Overnight, LME zinc formed a bearish candlestick, with the 5-day moving average providing resistance. The US November JOLTs job openings data and December ISM Non-Manufacturing PMI exceeded market expectations, and the US dollar index rebounded during the session, exerting continued pressure on zinc prices. LME zinc's center continued to edge downward. Overnight, SHFE zinc also formed a bearish candlestick, with support from the lower Bollinger Band. As the Chinese New Year holiday approaches, downstream demand is gradually weakening. Coupled with SMM's forecast of increased domestic refined zinc production in January, the supply-demand imbalance provides insufficient support for zinc prices, leading SHFE zinc to fluctuate downward.