China’s Inventory Continued to Increase, SHFE Zinc Fluctuated Downward [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,315.5/mt. At the start of the session, bulls and bears were intertwined, and LME zinc briefly rose to a high of $3,316.5/mt. Subsequently, bulls reduced open interest, and LME zinc fluctuated downward, falling to a low of $3,270.5/mt during European trading hours. It then saw its center move slightly higher and fluctuated in consolidation along the daily average line, finally closing lower at $3,293.5/mt, down $21/mt, a decline of 0.63%. Trading volume fell to 7,065 lots, and open interest decreased by 1,630 lots to 215,000 lots. Last Friday, LME zinc recorded a small bearish candlestick. As uncertainty surrounding the Iran war continued to drive the US dollar higher, base metals were all under pressure, and LME zinc closed lower. It is expected to remain in the doldrums today.

Last Friday, the most-traded SHFE zinc 2604 contract opened at 24,205 yuan/mt. At the start of the session, SHFE zinc briefly rose to a high of 24,255 yuan/mt, after which bears increased open interest, and SHFE zinc fluctuated downward all the way, touching a low of 24,070 yuan/mt near the close, and finally closed lower at 24,080 yuan/mt, down 60 yuan/mt, a decline of 0.25%. Trading volume fell to 37,382 lots, and open interest increased by 1,553 lots to 76,744 lots. Last Friday, SHFE zinc recorded a small bearish candlestick. Macro sentiment was weak, geopolitical turmoil resurfaced, and consumption in China fell short of expectations. Meanwhile, zinc ingot inventory in China continued to build up, with relatively heavy supply pressure, dragging the center of SHFE zinc lower. It is expected that SHFE zinc will remain in the doldrums today.

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