Zinc Morning Meeting Minutes for December 5
Futures: Overnight, LME zinc opened at $3,060/mt. Initially, it fluctuated around the daily average line. During European trading hours, the price center shifted below the daily average, hitting a low of $3,038.5/mt. Subsequently, bears reduced positions and exited, driving LME zinc upward throughout the night session, reaching a high of $3,102.5/mt. It finally closed up at $3,085/mt, gaining $23/mt, an increase of 0.75%. Trading volume decreased to 13,233 lots, and open interest fell by 810 lots to 222,000 lots. Overnight, the most-traded SHFE zinc 2601 contract opened at 22,835 yuan/mt. During the session, it fluctuated upward along the daily average line, reaching a high of 23,095 yuan/mt before closing up at 23,010 yuan/mt, gaining 170 yuan/mt, an increase of 0.74%. Trading volume decreased to 70,416 lots, while open interest increased by 899 lots to 107,000 lots.
Macro: US official stated Trump is considering withdrawing from the USMCA next year; US initial jobless claims fell to 191,000; Sources: BOJ rate hike in December almost certain, government will not interfere; Putin visited India, finalized a $2 billion nuclear-powered submarine lease deal; Presidents of DR Congo and Rwanda formally signed a peace agreement; PBOC: Conducted 1,000 billion yuan in outright reverse repo operations on December 5, 2025; Ren Hongbin, President of CCPIT, led a delegation to attend a seminar with the US Semiconductor Industry Association and its member companies.
Spot Market:
Shanghai: The refined zinc buying sentiment in Shanghai was 2.26, while the selling sentiment was 2.49. Shanghai zinc ingot inventory continued to decline. Spot availability remained tight yesterday. Traders continued to hold prices firm, with premiums against the average price continuing to rise, leading to stronger spot premiums. However, as zinc futures prices rose significantly, downstream enterprises were cautious due to high prices and adopted a wait-and-see approach. Some opted to purchase relatively lower-priced plant-delivered zinc ingots. Overall trading in Shanghai remained primarily among traders.
Guangdong: The refined zinc buying sentiment in Guangdong was 1.98, while the selling sentiment was 2.41. Overall, zinc prices continued to rise yesterday. End-users were cautious due to high prices and purchased cautiously. Meanwhile, some traders were reluctant to offer discounts, leading to reduced willingness to sell. Market offers decreased, and spot transactions weakened, resulting in a decline in spot premiums and discounts.
Tianjin: The refined zinc buying sentiment in Tianjin was 1.92, while the selling sentiment was 2.51. Zinc prices surged significantly yesterday, which downstream users found difficult to accept. Inquiries were very few. Traders slightly lowered their premiums/discounts for sales. Trading was mainly among traders, and overall market transactions were poor.
Ningbo: Most zinc ingot cargoes had been pre-sold earlier. Spot offers in the market remained scarce yesterday, and spot premiums stayed high. However, as zinc futures prices rose significantly, downstream enterprises showed almost no buying sentiment. Additionally, limited cargo availability restricted trading, resulting in sluggish market activity yesterday.
Social Inventory: On December 4, LME zinc inventory increased by 1,875 mt to 54,325 mt, up 3.57%. According to SMM communication, as of December 4, the total zinc ingot inventory in seven SMM-tracked regions was 140,300 mt, down 7,700 mt from November 27 and 4,000 mt from December 1, indicating a decrease in domestic inventory.
Zinc Price Forecast: LME zinc recorded a bullish candlestick overnight, with the upper Bollinger Band forming resistance and the middle Bollinger Band providing support. Although LME inventory increased overnight, it remains relatively low, and the LME Cash-3M backwardation structure is still high at $200/mt, indicating persistent structural risks. LME zinc is expected to fluctuate at highs. SHFE zinc recorded six consecutive bullish candlesticks overnight, breaking through the 23,000 yuan/mt integer resistance level. Currently, the fundamentals show a weak supply-demand pattern, providing upward momentum for zinc prices. However, the upside potential should not be overestimated, and cautious operation is advised.
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.
