Market Overview: Trump's dismissal of Fed officials triggered risk aversion, but the simultaneous decline in the US dollar index and US bond yields supported risk appetite. London zinc rose slightly by 0.05% overnight. Despite unchanged expectations of loose zinc ore supply and inventory rising to a five-month high, seasonal expectations and steady growth in automotive production and sales provide support, with spot zinc expected to rise today.
Zinc Futures Market: London zinc experienced a volatile session with an intraday high followed by consolidation, closing with a weak positive candlestick. The session opened at $2,804.5 per ton, reached a high of $2,817, touched a low of $2,787.5, and closed at $2,807, up $1 or 0.05%. Trading volume decreased by 235 lots to 8,015 lots, while open interest declined by 1,817 lots to 191,493 lots. Shanghai zinc showed relatively strong oscillation during evening trading, with the main 2510 contract closing at 22,355 yuan per ton, up 50 yuan or 0.22%.
Today's Spot Zinc Price Outlook: On the macro front, Trump's dismissal of Fed officials raised market concerns about central bank independence, shaking investor confidence. US crude oil traded around $63.44 per barrel, falling more than 2% on Tuesday, with Indian exports to the US potentially facing 50% tariff impacts. However, the simultaneous decline in the US dollar index and US bond yields supported risk appetite, with Fed September rate cut expectations exceeding 87%. This probability continued climbing after Powell released dovish signals last week. Morgan Stanley and other institutions, based on Powell's statement about "rising employment market risks," explicitly predicted rate cuts will begin in September. London zinc rose slightly by 0.05% to $2,807 per ton overnight.
Fundamentally, expectations of loose zinc ore supply remain unchanged. The weekly imported ore TC index rose to $92.5 per dry ton, with smelters having abundant raw materials and mainly purchasing domestic ore. Recently, domestic refineries and traders completed transactions for ordinary zinc ore deliveries in October, with TC transactions around $110 per dry ton. As of August 22, zinc concentrate inventory at smelters reached 630,000 tons (24 days of inventory), with port inventory at 217,000 tons. Combined with Shanghai Futures Exchange zinc ingot social inventory continuing to rise to a five-month high, domestic zinc prices face significant pressure.
However, LME market performance differs markedly. Since August, LME zinc inventory continued its downward trend to 65,525 tons, with registered warrants at only 41,825 tons remaining at relatively low levels. LME 0-3 spot shows slight backwardation, creating short-term overseas squeeze risks that support zinc prices. Meanwhile, domestic "Golden September, Silver October" seasonal expectations and steady growth in automotive production and sales provide support, with spot zinc expected to rise today.