Zinc Morning Meeting Minutes for January 5
Futures: Last Friday, LME zinc opened at $3,116/mt, then fluctuated rangebound around the daily average line, hitting a low of $3,115/mt. During the session, bears reduced positions, and LME zinc fluctuated upward above the daily average line, reaching a high of $3,142/mt. It pulled back slightly below the daily average line toward the close, ending up $1/mt at $3,127/mt, a gain of 0.03%. Trading volume increased to 67,421 lots, and open interest fell by 1,011 lots to 230,000 lots. Last Wednesday, the most-traded SHFE zinc 2602 contract opened at 23,360 yuan/mt. After opening, it rose slightly to a high of 23,370 yuan/mt, then fell quickly below the daily average line as bulls reduced positions. Toward the close, it recovered some losses with a slight rise as bears reduced positions, ending down 105 yuan/mt at 23,275 yuan/mt, a loss of 0.45%. Trading volume increased to 155,000 lots, and open interest decreased by 6,891 lots to 86,579 lots.
Macro: US forces "blitzed" Venezuela; Maduro is expected to make his "first court appearance" in New York on the 5th; Saudi Arabia launched airstrikes in Al Mahrah Governorate, eastern Yemen; Trump threatened to intervene regarding the unrest in Iran; eight OPEC+ nations agreed to suspend production increases in Q1; US Fed's Paulson stated that no additional interest rate cuts would be introduced immediately; BYD surpassed Tesla to become the global pure-electric sales champion in 2025.
Spot:
Shanghai: Last Wednesday, the purchasing sentiment for refined zinc in the Shanghai area was 1.92, and the selling sentiment was 1.97. On the last trading day before the New Year's Day holiday, downstream stockpiling was completed earlier, resulting in almost no willingness to sell or purchase last Wednesday. Few traders offered spot cargo, most quotes were indifferent, and overall market trading was nearly nonexistent.
Guangdong: The purchasing sentiment for refined zinc in the Guangdong area was 1.94, and the selling sentiment was 2.4. Overall, as the New Year's Day holiday approached, the number of traders offering spot cargo decreased. Meanwhile, downstream enterprises with holiday arrangements had mostly completed pre-holiday stockpiling, resulting in minimal purchasing. In contrast, inter-trader trading was relatively active. Amid sluggish transactions, spot premiums/discounts held steady.
Tianjin: Last Wednesday, the purchasing sentiment for refined zinc in the Tianjin area was 1.87, and the selling sentiment was 1.84. Zinc prices fluctuated at highs. On the last day before the New Year's Day holiday, downstream pre-holiday stockpiling was completed, and some enterprises had holiday arrangements. Most traders were off, leading to scarce spot offers and quotes. The overall market saw almost no transactions.
Ningbo: On the last trading day before the holiday, spot quotes in Ningbo were scarce and largely indifferent. Downstream enterprises showed almost no inquiry or purchase interest, with a strong holiday atmosphere prevailing in the overall market.
Inventory: On January 2, LME zinc inventory decreased by 1,300 mt to 106,325 mt, a 1.21% drop. According to SMM communication, as of last Wednesday (December 31), domestic zinc ingot inventory edged down slightly.
Zinc Price Forecast: Last Friday, the LME zinc contract recorded a bullish candlestick, with the 5-day and 60-day daily averages providing support below. Currently, localized international disputes persist, and short-term risk aversion sentiment may support zinc prices. However, overseas inventories are gradually rebounding from low levels, and LME zinc is expected to maintain a fluctuating trend. Last Wednesday, SHFE zinc recorded a bearish candlestick, with the 40-day and 60-day daily averages providing support below. Fundamentally, the decline in domestic ore TC has temporarily paused, while refined zinc production is expected to increase slightly within the month. Attention should be paid to the post-holiday consumption recovery of end-users. SHFE zinc is anticipated to maintain a fluctuating trend in the short term.
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. These data are for reference only and do not constitute decision-making advice.
