Zinc Morning Meeting Minutes, April 14
Futures: Last Friday, LME zinc opened at $2,632/mt. Initially, it fluctuated around the daily average line, touching a low of $2,620/mt. Subsequently, longs increased their positions, pushing LME zinc upward, with the overall center operating above the daily average line. During European trading hours, it reached a high of $2,688/mt, with the center fluctuating around $2,660/mt, and finally closed up at $2,661/mt, an increase of $32.5/mt, or 1.24%. Trading volume decreased to 10,427 lots, while open interest increased by 1,203 lots to 215,000 lots. Last Friday, the most-traded SHFE zinc 2506 contract opened at 22,445 yuan/mt. SHFE zinc experienced a tug-of-war between longs and shorts, fluctuating around the daily average line with an amplitude not exceeding 200 yuan/mt, and finally closed up at 22,480 yuan/mt, an increase of 135 yuan/mt, or 0.6%. Trading volume decreased to 59,166 lots, while open interest increased by 2,748 lots to 101,000 lots.
Macro:
Spot Market: Shanghai: In the morning session, the market quoted premiums of 70~90 yuan/mt against the average price, with fewer quotes against the futures. In the second trading session, ordinary domestic brands quoted premiums of 340~360 yuan/mt against the 2505 contract, Baiyin quoted a premium of 230 yuan/mt against the 2505 contract, Huize quoted premiums of 350~380 yuan/mt against the 2505 contract, and the high-priced brand Shuangyan quoted premiums of 350~380 yuan/mt against the 2505 contract. Last Friday, futures prices maintained a fluctuating trend, with market traders maintaining their premium quotes. Downstream maintained rigid demand for purchases, and overall spot transactions remained average.
Guangdong: In the first session, suppliers quoted premiums of 210~260 yuan/mt for Qilin, Mengzi, Huize, and Lanzinc. In the second session, Qilin and Huize quoted premiums of 230~260 yuan/mt against the net price. Overall, futures maintained a fluctuating trend. In the first session, zinc prices slightly declined. Guangdong traders quoted higher premiums, but downstream had already made more purchases at lower prices earlier, resulting in low enthusiasm for purchases at high premiums, with some downstream parties adopting a wait-and-see approach. In the second session, as zinc prices rose, the number of traders willing to sell decreased. Last Friday, market transactions were relatively average.
Tianjin: Tianjin quoted premiums of around 50 yuan/mt compared to Shanghai. By the midday close, Xizi quoted premiums of around 500 yuan/mt against the 05 contract, Xikuang delivery quoted around 300 yuan/mt against the 05 contract, and the high-priced brand Zijin quoted premiums of 510~550 yuan/mt against the 05 contract. Last Friday, zinc prices held up well. Downstream had made more purchases at earlier prices, and as futures rebounded, purchasing enthusiasm was low. Smelter traders stood firm on quotes, and premiums remained high, resulting in poor overall transactions.
Ningbo: In the first session, Qilin quoted premiums of 350~370 yuan/mt against the 2505 contract, and Honglu-v quoted a premium of 360 yuan/mt against the 2505 contract. In the second session, traders' quotes remained unchanged from the previous session. Last Friday, Qilin zinc ingots arrived in the Ningbo market. Traders continued to quote passively, and spot premiums remained high. However, downstream companies' buying sentiment remained low last Friday, and spot transactions showed no improvement.
Social Inventory: On April 11, LME zinc inventory decreased by 2,450 mt to 119,350 mt, a drop of 2.01%. According to SMM communication, as of April 10, the total zinc ingot inventory in seven regions monitored by SMM was 102,100 mt, a decrease of 7,000 mt compared to April 3 and a decrease of 8,900 mt compared to April 7, recording a decline in domestic inventory.
Zinc Price Forecast: Last Friday, LME zinc recorded a three-day winning streak, with support from the 5-day moving average below and resistance from the 10-day moving average above. Last Friday, the weakening US dollar provided support for non-ferrous metals, and LME zinc rebounded upward. However, China's imposition of a 125% tariff on the US limited its gains amid trade conflict concerns. Last Friday, SHFE zinc recorded a four-day winning streak, with support from the 5-day moving average below and the KDJ indicator expanding upward. Market sentiment improved, non-ferrous metals generally rose, and the center of SHFE zinc moved upward.
