Long and short funds stalemate at high levels, LME zinc fluctuates [SMM Morning Meeting Summary]

Futures: Overnight, LME zinc opened at $3,534/mt, quickly surged to a session high of $3,547.5/mt, then pulled back as bulls reduced their positions, dropping rapidly to touch a low of $3,513/mt during European trading. Prices then fluctuated amid mixed trading before closing down at $3,534.5/mt, a decline of $6/mt or 0.17%. Trading volume fell to 9,816 lots, and open interest decreased by 151 lots to 234,000 lots. Overnight, the most-traded SHFE zinc 2607 contract opened at 24,700 yuan/mt, briefly dipped to a low of 24,620 yuan/mt in early trading, then climbed steadily as bulls added positions, reaching a session high of 24,795 yuan/mt near the close, and finally settled up at 24,770 yuan/mt, a gain of 140 yuan/mt or 0.57%. Trading volume decreased to 43,112 lots, and open interest rose by 1 lot to 91,906 lots.
Macro: Iran and Israel exchanged fire for the first time since April, with both sides announcing a temporary halt to attacks after Trump intervened; US media reported that Trump warned Netanyahu that if he starts another war with Iran, he may find himself fighting alone; Iran's UN representative expressed hope that US-Iran negotiations will reach an agreement before the end of June; South Korean regulators will review speculative won trading; OpenAI disclosed that it has secretly filed for an IPO; The Communist Party Committee of the National Financial Regulatory Administration held an expanded meeting, emphasizing the steady mitigation of risks at small and medium-sized local financial institutions and the thorough rectification of disorderly competition in the financial sector.
Spot:
Shanghai: The purchasing sentiment for refined zinc in Shanghai was 2.2, and the shipment sentiment was 2.65. In the morning, zinc futures prices hovered at lows, prompting downstream enterprises to actively fix prices at these lower levels, though new purchase transactions were limited. Market traders raised spot quotes, and spot premiums edged up slightly yesterday.
Guangdong: The purchasing sentiment for refined zinc in Guangdong was 1.89, and the sales sentiment was 2.46. Yesterday, the zinc price center moved lower, but futures prices remained high. Downstream procurement was still mainly based on immediate needs, with a certain bearish sentiment prevailing in the market. Spot transactions were ordinary, the overall trading atmosphere was muted, and spot premiums remained unchanged.
Tianjin: The purchasing sentiment for refined zinc in Tianjin was 1.84, and the shipment sentiment was 2.48. Zinc prices pulled back slightly but did not reach the psychological price levels of downstream players. Downstream users made small-scale restocking purchases only for immediate needs with few fixings. Traders slightly raised the premiums on their shipments, but overall market transactions were mediocre.
Ningbo: Traders in the Ningbo market actively quoted and sold cargo. Yesterday, downstream enterprises fixed prices at lower levels in relatively large volumes, so traders raised their spot quotes, and spot premiums in the market rose accordingly. Overall spot trades improved MoM.
Inventory: On June 5, LME zinc inventory decreased by 300 mt to 110,650 mt, a decline of 0.27%. According to SMM communication, as of June 8, China's inventory increased by 1,600 mt to 265,700 mt.
Zinc Price Forecast: Overnight, LME zinc recorded a small bullish candlestick. Geopolitical tensions were frequent, the US dollar edged lower and weakened, while capital long-short positions were in a stalemate at high levels, causing the LME zinc center to shift slightly upward. Overnight, SHFE zinc recorded a small bullish candlestick, with the 5-day and 10-day moving averages above forming resistance. Macro disturbances were frequent. Fundamentally, China's end-use consumption weakened, and social inventory further built up. However, the further decline in China's zinc concentrate TCs provided some support for SHFE zinc, pushing its center higher. SHFE zinc is expected to fluctuate today.

Data Source Statement: All data other than publicly available information are obtained through processing by SMM based on public information, market communication, and SMM's internal database model, for reference only and not as a basis for decision-making advice.