Constant Macro Fluctuations, LME Zinc Center Rises Slightly [SMM Morning Meeting Minutes]

Futures: Overnight, LME zinc opened at $3,290/mt. At the start of the session, LME zinc fluctuated upward above the daily moving average, but after entering the European trading session, prices fluctuated downward to a low of $3,268.5/mt. After entering the night session, LME zinc rallied strongly, breaking through the daily moving average resistance, and touched a high of $3,334/mt near the close, ultimately closing up at $3,325/mt, up $40/mt, a gain of 1.22%. Trading volume decreased to 8,664 lots, and open interest increased by 291 lots to 212,000 lots. Overnight, the most-traded SHFE zinc 2605 contract opened at 23,765 yuan/mt. At the start of the session, SHFE zinc fluctuated downward to a low of 23,695 yuan/mt, then futures gradually stabilized near the daily moving average and maintained a fluctuating trend. Subsequently, bulls increased positions and the SHFE zinc center continued to shift upward, touching a high of 23,860 yuan/mt. Near the close, it hovered at highs, ultimately closing up at 23,810 yuan/mt, up 45 yuan/mt, a gain of 0.19%. Trading volume decreased to 31,616 lots, and open interest decreased by 149 lots to 77,219 lots.

Macro: Trump warned Iran not to collect Strait of Hormuz transit fees; Putin announced a 32-hour ceasefire for Orthodox Easter, and Ukraine announced it would follow suit; Israel's PM ordered direct negotiations with Lebanon; sources said Iran would not engage in peace talks with the US before a ceasefire was achieved in Lebanon; US media: the US government was expected to extend Russian oil sanctions waivers this week, potentially paving the way for Iranian oil waivers; Yemen's Houthi forces threatened to tighten Red Sea passage over the Lebanon attack issue; He Lifeng met with Ray Dalio, founder of US investment company Bridgewater; four government departments held a symposium with enterprises in the power and ESS battery industry.

Spot:

Shanghai: Yesterday, the refined zinc purchasing sentiment in the Shanghai region was 2.08, and the shipments sentiment was 2.70. Traders had relatively high shipments. Although zinc futures prices pulled back somewhat in the morning, downstream players remained mostly on the sidelines. Overall transactions showed no significant improvement yesterday, and spot premiums were basically stable compared to the previous day. Spot trades were mainly among traders.

Guangdong: Yesterday, the refined zinc purchasing sentiment in the Guangdong region was 1.90, and the sales sentiment was 2.82. Although the zinc price center moved downward, it had not reached the downstream psychological price level. Meanwhile, end-users still held certain inventory, and market transactions were light. Yesterday, there were many traders shipping out, but overall movement was sluggish, and spot premiums continued to decline.

Tianjin: Yesterday, the refined zinc purchasing sentiment in the Tianjin region was 1.79, and the shipments sentiment was 2.54. Yesterday, zinc prices pulled back slightly. Downstream players restocked in small quantities for rigid demand, traders maintained stable shipments, and overall market transactions improved slightly compared to the previous day.

Ningbo: In the morning, zinc futures prices fell compared to the previous session. Yesterday, traders in the Ningbo market slightly raised spot premiums, but downstream enterprise orders were mediocre. Yesterday, they still purchased on an as-needed basis, and overall trading had mediocre performance.

Inventory: On April 9, LME zinc inventory decreased by 275 mt to 112,050 mt, a decline of 0.24%. According to SMM communications, as of April 9, domestic inventory in China continued to build up.

Zinc price outlook: Overnight, LME zinc posted a bullish candlestick, with the upper Bollinger Bands acting as resistance and the lower Bollinger Bands providing support. Iran's deputy foreign minister stated that the Strait of Hormuz remains open, with transit requiring coordination with Iran, while hopes for a fragile ceasefire agreement in the Gulf region were rekindled. The US dollar index moved lower, and combined with LME zinc operating at low levels, the center of LME zinc prices edged higher. Overnight, SHFE zinc posted a small bullish candlestick, with the 40/60-day moving averages acting as resistance above and the 10/20-day moving averages providing support below. Amid fluctuations in macro sentiment, SHFE zinc was driven higher by LME, while expectations of declining TC provided some support for SHFE zinc. However, continued inventory buildup in China limited the upside for zinc prices.

Data source disclaimer: Data other than publicly available information is derived from public information, market communications, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.