SMM

Futures: Overnight, LME zinc opened at $2,991/mt. At the start of the session, LME zinc briefly dipped to $2,982/mt. Subsequently, as bears reduced their positions, LME zinc fluctuated upward, reaching a high of $3,031/mt during the night session. It finally closed up at $3,019.5/mt, an increase of $26/mt or 0.87%. Trading volume increased to 12,000 lots, while open interest decreased by 2,424 lots to 222,000 lots. Overnight, the most-traded SHFE zinc 2512 contract opened at 22,030 yuan/mt. At the beginning of the session, SHFE zinc briefly fell to 22,025 yuan/mt. As bears cut their positions, SHFE zinc fluctuated upward, touching a high of 22,180 yuan/mt. It eventually closed up at 22,140 yuan/mt, an increase of 140 yuan/mt or 0.64%. Trading volume dropped to 74,255 lots, and open interest decreased by 4,264 lots to 128,000 lots.
Macro:
The "shutdown" continues, with the US Senate rejecting a temporary funding bill for the 12th time; Media: The Trump administration is preparing to launch a drug investigation, paving the way for new tariffs; Sources: To curry favor with Trump, Sanae Takaichi has drafted a basket of procurement plans; Google announces successful development of a landmark quantum computing algorithm; In the first three quarters, China's foreign exchange receipts and payments reached a record high for the same period; Shenzhen: Aiming to exceed 20 trillion yuan in total market value of publicly listed firms at home and abroad by the end of 2027.
Shanghai: Yesterday, the purchasing sentiment for refined zinc in the Shanghai area was 2.27, and the selling sentiment was 2.5. With long-term contracts nearing their end, traders in the Shanghai market showed low purchasing sentiment yesterday. Overall, spot trades were sluggish, downstream orders were moderate, and spot purchases were made on a need-to basis. The overall trading activity was in the doldrums, with spot premiums remaining stable compared to the previous day.
Guangdong: Yesterday, the purchasing sentiment for refined zinc in the Guangdong area was 2.15, and the selling sentiment was 2.19. With zinc prices fluctuating, facing relatively low premiums and discounts, traders and downstream enterprises engaged in minor stockpiling, which pushed premiums and discounts upward. However, inter-trader transactions were more active, and the low premiums and discounts led to insufficient enthusiasm among traders to sell, resulting in a strong reluctance to budge on prices.
Tianjin: Yesterday, the purchasing sentiment for refined zinc in the Tianjin area was 2.11, and the selling sentiment was 2.49. Zinc prices saw a slight fluctuation, with relatively weak downstream consumption and low purchasing sentiment. Traders lowered their quotes due to poor sales, and trade was mainly between traders. Overall, market transactions were poor.
Ningbo: Most of the long-term contract zinc ingots from Yongchang and Anning that arrived earlier have been sold out. Yesterday, there were almost no spot quotations in the Ningbo market. Some traders began pre-selling subsequent arrivals of zinc ingots. Although downstream enterprises actively inquired about prices, due to limited supply, there were virtually no spot transactions. The situation regarding the arrival of zinc ingots needs to be closely monitored.
Social Inventory: On October 22, LME zinc inventory decreased by 1,975 mt or 5.3% to 35,300 mt. According to SMM, as of Monday (October 20), the total zinc ingot inventory across seven locations was 165,300 mt, an increase of 2,200 mt from October 13 and 2,600 mt from October 16, indicating an increase in domestic inventory.
Zinc Price Forecast: Overnight, LME zinc recorded a three-day winning streak, testing the 5/10-day moving averages. LME zinc inventory continued destocking, and the LME backwardation structure reached a record high. Bears reduced positions for risk aversion, while the US dollar performed weakly. LME zinc continued to rally, and it is expected to fluctuate at highs today. Overnight, SHFE zinc recorded a large bullish candlestick, with stronger overseas market trends boosting domestic prices. However, after the export window opened, domestic zinc ingot exports remained relatively limited. Overall consumption in October fell short of expectations, and the oversupply situation is unlikely to change. SHFE zinc is expected to trade sideways today.
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, for reference only and not intended as decision-making advice.