Improved Macro Sentiment, LME Zinc Rebounded From Lows [SMM Zinc Morning Meeting Summary]

March 24 Zinc Morning Meeting Summary

Futures: Overnight, LME zinc opened at $3,040.5/mt. After the opening, LME zinc fluctuated rangebound. During the session, LME zinc jumped to a high of $3,183/mt, then quickly pulled back to around the daily average line, before fluctuating upward along the daily average line and finally closing up at $3,103/mt, up $47/mt, or 1.54%. Trading volume increased to 16,643 lots, and open interest rose by 27 lots to 206,000 lots. Overnight, the most-traded SHFE zinc 2605 contract opened at 22,960 yuan/mt. After the opening, SHFE zinc fluctuated around the daily average line. Early in the session, SHFE zinc dipped to 22,915 yuan/mt, and during the session touched a high of 23,150 yuan/mt, before finally closing up at 23,075 yuan/mt, up 275 yuan/mt, or 1.21%. Trading volume increased by 14,306 lots to 78,945 lots, and open interest rose by 117 lots to 104,000 lots.

Macro: Trump said the US and Iran had held good and productive talks over the past two days, and any military strike targeting Iranian power plants and energy infrastructure would be postponed by five days; Iran's Revolutionary Guard said it had fully taken control of the Strait of Hormuz and there was no need to lay mines; messages had been passed between Iran and the US through Egypt and Türkiye; the Trump administration was assessing the possibility of supporting the Iranian parliament speaker in taking power; the Japanese government was considering intervening in oil futures; US Fed's Goolsbee said there could be circumstances requiring interest rate hikes.

Spot Market:

Shanghai: Yesterday, refined zinc purchase sentiment in Shanghai was 2.02, and shipment sentiment was 2.46. Yesterday morning, zinc prices on the futures maintained a fluctuating trend. Traders in the market showed some willingness to hold prices firm, and spot premiums continued to rise, but downstream enterprises had bought the dip last week and currently had sufficient raw material inventory. Yesterday, purchase willingness for zinc ingot was not strong, and overall spot trading performance was average.

Guangdong: Yesterday, refined zinc purchase sentiment in Guangdong was 2.18, and sales sentiment was 2.55. Yesterday, zinc prices fluctuated rangebound. Some downstream enterprises had already bought the dip last week, and purchase enthusiasm declined yesterday, but there were also some enterprises in the market that conducted small-scale restocking due to concerns over a rebound in zinc prices. Overall, market trading activity weakened WoW yesterday, and downstream procurement was mostly driven by rigid demand.

Tianjin: Yesterday, refined zinc purchase sentiment in Tianjin was 2.14, and shipment sentiment was 2.61. Yesterday, zinc prices were in the doldrums. Downstream buyers had basically completed pricing last week and were picking up goods one after another. Raw material inventory at downstream plants was relatively high. Yesterday, there was a small amount of inquiry, with limited actual transactions. Market trading was mainly dominated by traders, and traders' spot shipment premiums continued to rise slightly. Overall market transactions worsened WoW.

Ningbo: Last week, spot trading in Ningbo performed well. Yesterday, some suppliers in the market continued to raise spot quotes, but downstream buyers had a certain level of raw material inventory, and willingness to inquire yesterday was not high. Overall spot trading in the market weakened somewhat.

Social inventory: On March 20, LME zinc inventory decreased by 500 mt to 117,175 mt, down 0.42%; according to SMM communication, as of March 23, inventory in China declined.

Zinc price outlook: Overnight, LME zinc posted a bullish candlestick, with resistance formed at the upper Bollinger Bands. Macro market sentiment improved somewhat, and the US dollar index dropped back slightly from highs, boosting base metals higher and driving LME zinc to rebound from lows. Overnight, SHFE zinc also posted a bullish candlestick, with resistance formed at the 10-day moving average above. The strength in the external market boosted gains in the domestic market, and with SMM zinc ingot inventory continuing to decline on Monday, fundamentals gradually improved, lifting the center of SHFE zinc in the night session.

Data source statement: Except for public information, all other data are processed and derived by SMM based on public information, market communication, and SMM's internal database models, and are for reference only and do not constitute decision-making advice.