SMM December 15:
Futures: Last Friday, LME zinc opened at $3,192/mt. In early trading, it fluctuated around the daily average line, then climbed to a high of $3,210/mt during European trading hours. Subsequently, during the night session, bears increased their positions, causing LME zinc to fluctuate downward and hit a low of $3,117.5/mt before closing. It finally settled at $3,139/mt, down $59/mt, a decrease of 1.84%. Trading volume dropped to 18,376 lots, while open interest increased by 3,372 lots to 223,000 lots. Last Friday, the most-traded SHFE zinc 2601 contract opened at 23,480 yuan/mt. It briefly rose to a high of 23,600 yuan/mt in early trading, but then bulls reduced their positions, leading to a sharp decline. It hit a low of 23,205 yuan/mt before closing and finally settled at 23,305 yuan/mt, down 300 yuan/mt, a decrease of 1.27%. Trading volume dropped to 120,000 lots, while open interest decreased by 4,925 lots to 86,449 lots.
Macro:
The US Fed continues to debate internally; Trump stated a preference for selecting Warsh or Hassett to succeed as Fed Chairman; Zelenskyy: The US and Europe do not support Ukraine joining NATO, Ukraine compromises in exchange for security guarantees; Thailand denies Trump's claim that Thailand and Cambodia agreed to a ceasefire; SpaceX approves internal stock trading, valuation reaches approximately $800 billion; In the first 11 months, China's aggregate financing to the real economy exceeded the full-year amount of the previous year; Vice Premier He Lifeng: Continue to implement appropriately accommodative monetary policy and manage expectations well.
Shanghai: Last Friday, the refined zinc purchasing sentiment in Shanghai was 2.10, while the selling sentiment was 2.53. Zinc futures prices rose significantly to above 23,500 yuan/mt, causing downstream enterprises to exhibit a strong fear of high prices, with almost no inquiries or purchases for spot cargo. However, market supply remained tight, and traders continued to hold prices firm. Spot premiums showed no decline. Overall trading on Friday was primarily among traders.
Guangdong: Last Friday, the refined zinc purchasing sentiment in Guangdong was 1.89, while the sales sentiment was 2.31. Overall, the price center of zinc saw a significant increase last Friday, dampening downstream purchasing enthusiasm. Purchases were mainly for essential restocking by those holding long positions or trading among traders. Overall market trading was sluggish, and spot premiums/discounts remained flat compared to Thursday.
Tianjin: Last Friday, the refined zinc purchasing sentiment in Tianjin was 1.79, while the selling sentiment was 2.49. Zinc prices rose sharply last Friday. Downstream buyers were cautious due to high prices, with almost no inquiries. Traders' offers held steady, and trading was mainly among traders. Overall market turnover was poor.
Ningbo: As previously available cargo was gradually digested, there were almost no spot offers in the market. Traders continued pre-selling subsequent arrivals. Overall spot premiums remained high, but the significant rise in zinc prices led to almost no purchasing or acceptance of goods by downstream users, resulting in sluggish spot trading.
Social Inventory: On December 12, LME zinc inventory increased by 1,575 mt or 2.61% to 61,925 mt. According to SMM communication, as of last Thursday (December 11), the total zinc ingot inventory in seven SMM-monitored regions was 128,200 mt, down 12,100 mt from December 4 and 7,800 mt from December 8, indicating a decrease in domestic inventory.
Zinc Price Forecast: Last Friday, LME zinc recorded a large bearish candlestick. Optimism brought by the US Fed's interest rate cuts faded, the US dollar index rebounded, nonferrous metals were generally under pressure, and LME zinc declined. LME zinc is expected to fluctuate today. Last Friday, SHFE zinc recorded a small bearish candlestick. Macro optimism weakened, nonferrous metals mostly fell, but zinc concentrate TCs continued to decline, smelter profits were squeezed, production willingness decreased, domestic zinc ingot inventory continued destocking, and supply-side support remained. SHFE zinc is expected to fluctuate 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 constituting decision-making advice.
