Futures: Overnight, LME zinc was closed for a summer bank holiday. SHFE zinc opened at 22,355 yuan/mt. At the beginning of the session, with increased short positions, SHFE zinc dropped to a low of 22,260 yuan/mt. Subsequently, with increased long positions, the center of SHFE zinc slightly rebounded. Then, intense competition between long and short positions caused SHFE zinc to fluctuate rangebound around 22,300 yuan/mt. It finally closed down at 22,295 yuan/mt, a decrease of 100 yuan/mt or 0.45%. Trading volume decreased to 36,289 lots, while open interest increased by 2,542 lots to 108,000 lots.
Macro: Trump: Will reduce drug prices by 1,400%-1,500%; US plans to add copper and potash to the list of critical minerals; Intel warns: US government investment could pose risks; US Fed's Logan: There is still room to lower bank system reserves; Hassett: It is appropriate for the US Fed to consider an interest rate cut; NDRC's latest statement: Continuously improving policies to boost domestic demand; Shanghai optimizes and adjusts real estate measures.
Spot market:
Shanghai: With arrivals of Qilin and Harzinc in the Shanghai market, there was ample supply. Traders mainly sold goods yesterday. However, as the futures slightly rose in the morning, downstream enterprises showed low purchasing sentiment and continued to purchase as needed. Overall, transactions were not smooth, and spot quotations were in the doldrums.
Guangdong: In general, the center of the futures market rose MoM yesterday. Downstream fear of high prices emerged, leading to weaker spot transactions. Meanwhile, some traders still showed reluctance to budge on prices, and spot premiums and discounts remained unchanged from last Friday.
Tianjin: The futures market rebounded yesterday, but enterprise purchasing sentiment was low. Additionally, starting from yesterday, only new energy vehicles were allowed into factories in Tianjin and Hebei, significantly impacting procurement. Traders slightly lowered premiums, and overall market transactions were mediocre.
Ningbo: Qilin zinc ingots arrived in the Ningbo market over the weekend. Yesterday, Ningbo traders actively quoted and sold goods, maintaining low spot quotations. However, as the futures market rebounded in the morning, downstream zinc alloy plants purchased as needed, and spot transactions were mediocre.
Social inventory: According to SMM, as of Monday (August 25), the total zinc ingot inventory in seven regions reached 138,500 mt, up 3,100 mt from August 18 and 5,600 mt from August 21, indicating an increase in domestic inventory.
Zinc price forecast: Overnight, SHFE zinc recorded a bearish candlestick, with the 20- and 40-day moving averages exerting pressure from above, and the 60-day moving average providing support from below. Based on SMM data, as of Monday, domestic social inventory continued to increase, and overall domestic consumption has not shown significant improvement, weakening support for SHFE zinc. However, the latest positive signals from the NDRC suggest that SHFE zinc will maintain a fluctuating trend.
Data source statement: Apart from publicly available information, other data are based on public information, market exchanges, and SMM's internal database model, processed by SMM for reference only and do not constitute decision-making advice.
