Futures: Overnight, LME zinc opened at $3,002.50/mt, with its center rising initially to touch a high of $3,040.00/mt, then fluctuating downward to probe a low of $2,987.00/mt. It subsequently gradually recovered the losses and rose, but encountered resistance and pulled back toward the session's close, eventually closing at $3,012.00/mt, up $27.5/mt, a gain of 0.92%. Trading volume increased to 141,000 lots, and open interest rose by 621 lots to 221,000 lots. Overnight, the most-traded SHFE zinc 2511 contract opened at 22,330 yuan/mt, reaching a high at the opening, then quickly moved downward as bulls reduced positions to probe a low of 22,235 yuan/mt. It then rose to recover the losses. Toward the session's close, a tug-of-war between longs and shorts kept the contract's center fluctuating around 22,290 yuan/mt, and it finally closed at 22,285 yuan/mt, up 30 yuan/mt, a gain of 0.13%. Trading volume decreased to 54,960 lots, and open interest fell by 2,031 lots to 99,668 lots.
Macro: US Fed's Paulson hinted at supporting two more interest rate cuts this year; four countries signed the Comprehensive Document on the Gaza Ceasefire Agreement; OPEC maintained its global crude oil demand growth forecast; the central bank and the Monetary Authority of Macao signed a memorandum on cross-border payment connectivity.
Spot:
Shanghai: The refined zinc procurement sentiment in Shanghai was 2.23, and the sales sentiment was 2.49. Yesterday, few traders sold in the Shanghai market, and spot premiums quotes remained high. However, as futures fluctuated, downstream enterprises made just-in-time procurement purchases. Spot trades in the Shanghai market were mainly among traders.
Guangdong: The refined zinc procurement sentiment in Guangdong was 2.03, and the sales sentiment was 2.35. Currently, inventory in Guangdong continues to increase. Although downstream enterprises have procurement demand, it is mostly just-in-time procurement. High inventory exerted some pressure on the upward movement of spot premiums/discounts. Meanwhile, the price spread between futures contracts widened yesterday, leading to a slight decrease in premiums/discounts.
Tianjin: The refined zinc procurement sentiment in Tianjin was 2.14, and the sales sentiment was 2.34. Yesterday, zinc prices dropped back slightly, but downstream enterprises still held relatively high inventory, resulting in moderate procurement sentiment. However, some enterprises made just-in-time procurement. Traders' quotes held steady with a slight firmness, and overall market turnover was moderate.
Ningbo: As previously accumulated zinc ingot inventories were gradually consumed, some downstream enterprises began purchasing to restock. Overall turnover performance was moderate, and traders showed some reluctance to budge on prices, leading to a slight increase in spot quotes.
Inventory: On October 10, LME zinc inventory decreased by 475 mt to 37,475 mt, a drop of 1.25%. According to SMM communication, as of this Monday (October 13), the total zinc ingot inventory across seven regions tracked by SMM was 163,100 mt, increasing by 21,700 mt compared to September 29 and by 12,900 mt compared to October 9, indicating a rise in domestic inventory.
Zinc Price Forecast: Overnight, LME zinc recorded a bullish candlestick, with support provided by the 20-day and 60-day daily average moving averages below. The current international trade situation remains uncertain, and there is still some risk-aversion sentiment in the market. Expectations for a US Fed interest rate cut continue to rise, coupled with the continued decline in overseas zinc inventory, and the backwardation structure has widened to over 100, providing strong support for LME zinc. Overnight, SHFE zinc recorded three consecutive declines, with support provided by the 5-day and 40-day daily average moving averages below. According to statistics from SMM, as of yesterday, domestic social inventory has increased to over 160,000 mt, with spot cargo performance showing looser conditions and inventory gradually building up, exerting some pressure on the upward movement of zinc prices. Attention should be paid to subsequent domestic market consumption and destocking performance.
Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model, and are for reference only, not constituting decision-making advice.
