Futures: Overnight, LME zinc opened at $3,365/mt. At the beginning of the session, LME zinc dipped slightly to $3,357/mt, then prices continued to rise, reaching a high of $3,442/mt. Late in the session, prices pulled back slightly from highs and consolidated, ultimately closing up at $3,409.5/mt, up $51/mt, a gain of 1.52%. Trading volume increased to 101,000 lots, and open interest increased by 4,648 lots to 236,000 lots. Overnight, the most-traded SHFE zinc 2606 contract opened lower with a gap at 24,180 yuan/mt. At the beginning of the session, SHFE zinc fluctuated downward slightly, touching a low of 24,125 yuan/mt. Subsequently, bears reduced positions, and prices fluctuated upward above the daily average line, reaching a high of 24,250 yuan/mt. Late in the session, prices moved sideways, ultimately closing down at 24,205 yuan/mt, down 45 yuan/mt, a decline of 0.19%. Trading volume decreased to 37,900 lots, and open interest decreased by 1,278 lots to 92,124 lots.
Macro: US ADP employment data showed a slightly higher-than-expected increase; US gasoline prices approached historic highs; Japanese media: Bessent will visit Japan next week to discuss yen weakness; US media reported that the US and Iran may end hostilities first and then set a 30-day negotiation period; Wang Yi held talks with Iranian Foreign Minister Araghchi.
Spot:
Shanghai: Yesterday, the refined zinc purchasing sentiment in the Shanghai area was 2.06, and the shipments sentiment was 2.44. On the first trading day after the holiday, due to tax invoice issues, traders had limited shipments. The overall sentiment to hold prices firm was strong, and spot premiums continued to rise. However, futures zinc prices also strengthened, and downstream factories made few inquiries. Overall spot transactions were basically conducted on a as-needed basis with back-pricing.
Guangdong: Yesterday, the refined zinc purchasing sentiment in the Guangdong area was 1.78, and the sales sentiment was 2.36. Yesterday, the zinc price center moved notably higher. Combined with the recent tightening of invoice quotas in the spot market, some traders were less motivated to sell due to this impact, passively "lying flat." Traders offering shipments quoted higher prices, and downstream fear of high prices emerged. Spot market trading was ordinary.
Tianjin: Yesterday, the refined zinc purchasing sentiment in the Tianjin area was 1.91, and the shipments sentiment was 2.21. Yesterday, zinc prices rebounded significantly, and downstream buyers were cautious about purchasing at high levels. Today, overall purchasing sentiment was low. Traders still had limited shipments due to invoice issues. Market quotes were rather disorderly, and spot premiums were largely stable. Overall market transactions were mediocre.
Ningbo: On the first trading day after the holiday, futures zinc prices rose notably. Downstream alloy plants showed strong wait-and-see sentiment, and some plants had not yet consumed their raw material inventory. Today, overall spot transactions were weak.
Inventory: On May 6, LME zinc inventory decreased by 1,450 mt to 94,800 mt. According to SMM communications, as of May 6, China's inventory increased by 3,300 mt to 255,900 mt.
Zinc price outlook: Overnight, LME zinc posted a bullish candlestick, with the 40/60-day moving averages providing support below. The renewed hopes for U.S.-Iran peace talks further eased inflation concerns and upward pressure on interest rates. Meanwhile, inventories outside China continued to decline, supporting the LME zinc price center to move higher. Overnight, SHFE zinc recorded a small bullish candlestick, with various moving averages below providing support. After the holiday, China's social inventory continued to rise, while the spot market recently showed lackluster activity due to bill-related issues. Resistance remains above zinc prices, but TCs hovering at lows provided bottom support for zinc prices, and SHFE zinc maintained a fluctuating trend.
Data Source Disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.
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