LME zinc posted modest gains in overnight trading on August 11, 2026, consolidating near recent highs as persistently low exchange inventories and position squaring by bears underpinned market sentiment, according to the SMM Zinc Morning Meeting Minutes published by Shanghai Metals Market. Overnight, LME zinc opened at $3,711 per metric ton before drifting lower during the European session, touching an intraday low of $3,687 per metric ton. As bears reduced their positions, prices recovered steadily through the night session, reaching a high of $3,745.5 per metric ton before closing at $3,735.5 per metric ton, a gain of $37.5 per metric ton or 1.01%.
Trading volume fell to 11,048 lots, while open interest declined by 6,595 lots to 247,000 lots, according to SMM. On the Shanghai Futures Exchange, the most-traded SHFE zinc 2609 contract opened at 25,555 yuan per metric ton and briefly dipped to a session low of 25,460 yuan per metric ton before recovering. Bears covering their positions pushed the contract to a high of 25,700 yuan per metric ton near the close, with the contract ultimately settling at 25,650 yuan per metric ton, up 35 yuan per metric ton, though this represented a decline of 0.14% on the day.
Trading volume on the SHFE contract fell to 49,734 lots, while open interest decreased by 1,326 lots to 119,000 lots. On the inventory front, LME zinc stocks edged up by just 50 metric tons on August 10 to 97,125 metric tons, a marginal increase of 0.05%, leaving global exchange inventories at historically subdued levels. SMM noted that the exact volumes of domestic zinc ingots being shipped to LME delivery warehouses remain unconfirmed due to pending shipping schedules, a factor that continues to introduce uncertainty into the supply picture.
Domestic Chinese inventories also moved lower. According to SMM data, total zinc ingot stocks across SMM's seven tracked regions stood at 267,400 metric tons as of Monday, August 10, down 5,100 metric tons from August 3 and down 4,300 metric tons from August 6. SMM attributed the drawdown partly to exports of domestic zinc ingots, which the firm said has provided price support to SHFE zinc.
Spot market activity across China's major zinc trading hubs was broadly subdued. In Shanghai, purchasing sentiment for refined zinc registered at 1.84 against a selling sentiment of 2.46, with most downstream enterprises maintaining a bearish price outlook. Spot trades were further hindered by typhoon-related disruptions to cargo pick-up at Shanghai warehouses, which also led some traders to take leave.
Spot premiums were largely unchanged in the city. In Guangdong, purchasing sentiment came in at 1.98 with selling sentiment at 2.60. Trading activity recovered slightly as the center of zinc prices moved lower, but end-use consumption remained in the seasonal off-period, limiting actual purchases to essential restocking after price pullbacks.
Spot premiums in the region strengthened slightly. The Tianjin market saw purchasing sentiment of 1.77 versus selling sentiment of 2.43. Downstream users largely restricted purchases to immediate requirements, with limited inquiries and traders quoting in a relaxed manner.
Premiums were stable and overall transactions were poor. In Ningbo, typhoon weather caused most downstream factories to suspend operations, resulting in a near-complete absence of inquiries and purchases, with spot premiums little changed from the previous session. On the macroeconomic front, market participants were monitoring several developments including reported US demands for compensation from Iran as part of future negotiations, a 90-day extension of the Jones Act shipping waiver narrowed to energy commodities and fertilizers, and comments from US Federal Reserve official Hammack suggesting multiple rate hikes may be needed to curb inflation.
China's central bank also signaled intentions to refine its monetary policy framework and base money injection mechanisms. Looking ahead, SMM expects LME zinc to continue consolidating at elevated levels, supported by persistently low LME inventory levels and ongoing uncertainty around the timing of domestic zinc shipments arriving at LME delivery points. SHFE zinc is similarly forecast to hold at highs, driven by LME price dynamics and continued domestic inventory drawdowns linked to export activity.
All data cited in this article is sourced from Shanghai Metals Market (SMM) and is intended for reference purposes only. SMM notes that all data beyond publicly available information is processed based on public sources, market communications, and SMM's internal database models, and does not constitute investment advice.
Source: news.metal.com