China’s Social Inventory Destocking, SHFE Zinc Center Rebounded [SMM Zinc Morning Comment]

SMM News, March 19:

Overnight, LME zinc opened at $3,132.5/mt. In early trading, LME zinc briefly rose to a high of $3,136/mt, after which bears increased their open interest and LME zinc fluctuated downward all the way, touching a low of $3,125/mt in the night session. The center then rebounded, and it finally closed down at $3,073.5/mt, down $59/mt, or 1.88%. Trading volume increased to 18,995 lots, and open interest rose by 607 lots to 209,000 lots. Overnight, LME zinc recorded a long lower-shadow bearish candlestick. The market began to bet on a US Fed rate hike, and the US dollar remained strong, leaving base metals under pressure. LME zinc moved under pressure, and it was expected to fluctuate today.

Overnight, the most-traded SHFE zinc 2605 contract opened lower with a gap at 22,350 yuan/mt, which was also the intraday low. Bulls then increased their open interest, and SHFE zinc fluctuated upward all the way, touching a high of 22,940 yuan/mt near the close, and finally closed up at 22,860 yuan/mt, up 155 yuan/mt, or 0.68%. Trading volume fell to 93,582 lots, and open interest increased by 852 lots to 105,000 lots. Overnight, SHFE zinc recorded a bullish candlestick with no lower shadow. Macro sentiment remained weak, while tensions in the Middle East eased slightly. In China, after zinc prices broke down and fell and consumption gradually recovered, destocking was delivered as expected, and fundamentals were somewhat supportive. SHFE zinc was expected to fluctuate today.

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