LME Zinc Ingot Inventory Remains Low, LME Zinc Fluctuates at Highs [SMM Zinc Morning Meeting Minutes]

Zinc Morning Meeting Minutes for February 26

Futures: Overnight, LME zinc opened at $3,387.5/mt, fluctuated upward after opening, touched a high of $3,416.5/mt, then pulled back all the way, approaching the end of the session, LME zinc touched a low of $3,362.5/mt, then rebounded from lows to near the daily average line, finally closed down at $3,387/mt, down $0.5/mt, a decrease of 0.01%, trading volume decreased to 9,705 lots, open interest decreased by 782 lots to 229,000 lots. Overnight, the most-traded SHFE zinc 2604 contract opened at 24,590 yuan/mt, after opening, SHFE zinc briefly fluctuated downward, touched a low of 24,550 yuan/mt, then rose all the way, touched a high of 24,715 yuan/mt towards the end of the session, finally closed down at 24,675 yuan/mt, down 35 yuan/mt, a decrease of 0.14%, trading volume decreased to 39,861 lots, open interest increased by 1,633 lots to 91,117 lots.

Macro: CME Group once suspended metals and natural gas futures and options trading due to "technical issues"; Nvidia's Q4 earnings report was impressive, the company stated that computing power demand remains hungry; US Trade Representative Greer: The US will issue an announcement on 15% tariffs; Sources said, if the US launches strikes against Iran, Saudi Arabia plans to significantly increase oil production in the short term; Trump: Tariffs will continue to be implemented; Iran is still pursuing nuclear ambitions.

Spot Market:

Shanghai: Yesterday, the procurement sentiment for refined zinc in the Shanghai area was 1.86, and the shipment sentiment was 2.33. Market traders actively offered shipments, overall zinc ingot supply was ample, but downstream enterprises had not fully resumed production, zinc prices maintained a fluctuating trend, yesterday zinc ingot transactions in the Shanghai market remained sluggish.

Guangdong: Yesterday, the procurement sentiment for refined zinc in the Guangdong area was 1.61, and the sales sentiment was 2.04. Yesterday, zinc prices continued to hover at highs, end-use demand remained relatively weak, enterprise procurement pace was slow, spot transactions performed averagely, the premiums and discounts quoted in the market slightly declined.

Tianjin: Yesterday, the procurement sentiment for refined zinc in the Tianjin area was 1.6, and the shipment sentiment was 1.83. Yesterday, zinc prices mainly fluctuated, downstream was still in the process of gradually resuming work, point price cargo pick-up was limited, traders slightly lowered shipment premiums, the market was relatively sluggish, overall transactions were few.

Ningbo: Ningbo zinc ingot inventory continued to build up, yesterday there were many traders shipping goods in the Ningbo market, but downstream had not fully resumed work, yesterday inquiries remained few, some traders lowered spot quotations to ship goods, yesterday there were certain discrepancies in spot quotations, overall market transaction performance was average.

Social Inventory: On February 24, LME zinc inventory decreased by 1,425 mt to 99,825 mt, a decrease of 1.41%; According to SMM communication and understanding, as of February 24, domestic inventory increased.

Zinc Price Forecast: Overnight, LME zinc recorded a small bearish candlestick, the below 10/20-day daily average lines provided support, US tariff policies are still unclear, but market expectations for demand improvement boosted nonferrous metal trends, coupled with LME zinc ingot inventory operating at low levels, LME zinc is expected to maintain fluctuating at highs. Overnight, SHFE zinc recorded a bullish candlestick, with the middle Bollinger Band forming resistance. Boosted by LME zinc prices, SHFE zinc also remained high during the night session. However, as downstream enterprises have not fully resumed operations, the pace of zinc ingot inventory buildup is expected to continue this week. Fundamentals provide insufficient support for zinc prices, and SHFE zinc is likely to maintain a fluctuating trend.

Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model. They are for reference only and do not constitute decision-making advice.