Futures Market: Overnight, LME zinc opened at $2,687/mt. In the early session, LME zinc oscillated along the daily moving average, briefly dipping to a low of $2,675/mt. During European trading hours, bulls increased their positions, driving LME zinc up to a high of $2,715.5/mt. Subsequently, bears increased their positions, causing the center of LME zinc prices to shift downward. It eventually closed lower at $2,680.5/mt, down $5.5/mt or 0.2%. Trading volume increased to 14,712 lots, and open interest rose by 2,923 lots to 213,000 lots. Overnight, the most-traded SHFE zinc 2508 contract opened at 21,975 yuan/mt. In the early session, bears increased their positions, causing SHFE zinc to quickly decline to a low of 21,860 yuan/mt. Later, with insufficient downward momentum, the center of prices shifted slightly upward. It eventually closed lower at 21,905 yuan/mt, down 15 yuan/mt or 0.07%. Trading volume decreased to 68,309 lots, and open interest rose by 4,237 lots to 126,000 lots.
Macro: Trump believes both Iran and Israel have violated the ceasefire agreement but also states that neither will face consequences for doing so. Powell: Can wait and see before considering interest rate adjustments. US Senate Republicans plan to vote on Trump's "Beautiful Bill" on Friday. UK media: EU prepares to take more tariff countermeasures to pressure the US. The 80th Anniversary of the Victory of the Chinese People's War of Resistance Against Japanese Aggression commemorative event, including a military parade, will be held on the morning of September 3. PBOC: Conducted 300 billion yuan in Medium-term Lending Facility (MLF) operations on June 25 with a one-year term.
Spot Market: Shanghai: At the end of long-term contracts, there was limited supply in the Shanghai market yesterday. Traders showed high purchase willingness, continuously refusing to budge on prices for domestically produced spot zinc. Overall, spot premiums remained stable. However, with the futures market significantly rising, downstream purchase willingness was low, and overall spot transactions in the market were mainly between traders.
Guangdong: Overall, the center of futures prices rose compared to yesterday. Most downstream buyers with stocking demand made purchases during the morning session, and market transactions slowed down in the second session. Arrivals in the Guangdong region have decreased recently, with some traders slightly raising premiums to sell. However, with the futures market rising and the price spread between futures contracts shrinking yesterday, spot premiums continued to decline slightly.
Tianjin: Zinc prices have rebounded to a level that is difficult for downstream buyers to accept, resulting in low purchase willingness. Additionally, with new long-term contracts about to be executed, traders continued to lower premiums to facilitate sales. Premiums continued to decline, with transactions mainly between traders, and overall market transactions were weak.
Ningbo: Qilin zinc ingots arrived at the Ningbo port the day before yesterday, increasing the supply of zinc ingots in the market. Moreover, with the futures market significantly rising yesterday, downstream just-in-time purchases resulted in poor overall transactions. Traders continued to lower premium quotes to facilitate sales.
Social Inventory: LME zinc inventory fell by 2,450 mt to 123,450 mt on June 24, a decrease of 1.95%. According to SMM communications, as of Monday (June 23), the total zinc ingot inventory across seven locations tracked by SMM was 77,800 mt, a decrease of 1,000 mt from June 16 and 1,800 mt from June 19, indicating a decline in domestic inventory.
Zinc Price Forecast: Overnight, LME zinc recorded a long upper shadow bearish candlestick, with the 20/40-day moving averages above exerting pressure. Due to the Israel-Hamas ceasefire dampening risk-averse sentiment and Powell stating that more time is needed before considering an interest rate cut, the US dollar weakened, providing some support to LME zinc prices. However, consumption expectations remain weak, and LME zinc traded in a range-bound manner, with volatility expected to continue today. Overnight, SHFE zinc recorded a bearish candlestick, under pressure from the 40-day moving average. Although macro sentiment has improved somewhat, domestic consumption is gradually weakening, and there are still expectations of a supply surplus for zinc. SHFE zinc adjusted slightly, and it is expected to continue trading in a range-bound manner today.
