Driven by Macro Factors, LME Zinc Rose to Record Three-Day Winning Streak [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc opened at $3,397.5/mt. Early in the session, LME zinc saw small fluctuations downward to a low of $3,392.50/mt. Subsequently, bulls increased open interest, pushing prices to fluctuate upward and touch a high of $3,461.00/mt. Toward the end of the session, LME zinc pulled back slightly, ultimately closing higher at $3,447.00/mt, up $37.5/mt or 1.10%. Trading volume increased to 87,481 lots, and open interest increased by 892 lots to 237,000 lots. Overnight, the most-traded SHFE zinc 2606 contract opened higher with a gap at 24,350 yuan/mt. Early in the session, SHFE zinc briefly rose to a high of 24,410 yuan/mt, then pulled back under pressure. Near the end of the session, it moved below the daily average line to a low of 24,280 yuan/mt, ultimately closing higher at 24,315 yuan/mt, up 30 yuan/mt or 0.12%. Trading volume decreased to 41,272 lots, and open interest increased by 895 lots to 90,766 lots.

Macro: South Korea surpassed Canada to become the world's seventh-largest stock market; Trump extended the deadline for the EU to approve a tariff deal; World Gold Council: Global gold ETFs turned to net inflows in April; The US and Iran exchanged fire, but the US military said it had no intention of escalating the situation; Brazil announced visa-free entry for Chinese citizens; Offshore yuan strengthened past the 6.8 mark against the US dollar.

Spot:

Shanghai: Yesterday, the refined zinc purchase sentiment in the Shanghai area was 1.98, and the shipments sentiment was 2.40. Yesterday, there were not many traders making shipments in the market. With continued firm pricing, spot premiums continued to rise. Zinc futures prices fluctuated at highs, and downstream enterprises had strong wait-and-see sentiment. Overall spot transactions were basically on an as-needed basis.

Guangdong: Yesterday, the refined zinc purchase sentiment in the Guangdong area was 1.77, and the sales sentiment was 2.43. Yesterday, zinc prices hovered at highs. Downstream still had a certain degree of fear of high prices, with purchases limited to rigid demand. Meanwhile, there were still not many traders making shipments in the market, and market quotes remained relatively high, supporting spot premiums to continue to rise.

Tianjin: Yesterday, the refined zinc purchase sentiment in the Tianjin area was 1.87, and the shipments sentiment was 2.25. Yesterday, zinc prices continued to fluctuate at highs. Downstream maintained a wait-and-see stance. Overall purchase sentiment was low yesterday. Circulating volumes in the market were relatively small. Traders slightly raised spot premiums for shipments. Overall market transactions were mediocre.

Ningbo: Yesterday, cargo volumes in the Ningbo market were limited. Traders continued to raise spot premiums. There was significant divergence in overall premium quotes in the market. Some major producers still had raw material inventory. Yesterday, spot inquiries and purchases were basically on an as-needed basis, and overall spot trades were sluggish.

Inventory: On May 7, LME zinc inventory decreased by 375 mt to 94,425 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 recorded a three-day winning streak, with various moving averages below providing support. Trump extended the deadline for the EU to approve a tariff agreement, coupled with market expectations that the U.S. and Iran are likely to reach a temporary ceasefire agreement. The resonance of geopolitical and trade sentiment drove the center of LME zinc steadily higher. Overnight, SHFE zinc posted a small bearish candlestick, with various moving averages below providing support. Although China's inventory currently stays high, the recent continuous decline in TCs has provided bottom support for zinc prices, and SHFE zinc continues to hover at highs.

Data Source Disclaimer: Data other than public 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.