LME drives SHFE zinc higher [SMM zinc morning comment]

Overnight, LME zinc opened at $3,526/mt, which was the intraday low. Then bears reduced positions, and LME zinc drifted higher during the night session, touching a high of $3,638/mt. It then consolidated and finally closed up at $3,616/mt, gaining $88/mt, or 2.49%. Trading volume increased to 15,870 lots, and open interest fell by 3,793 lots to 268,000 lots. Overnight, LME zinc formed a large bullish candlestick. The window for US-Iran conflict negotiations may reopen, easing concerns that an expanded war would push up inflation and interest rates. Macro sentiment improved, and with LME inventories remaining low, LME zinc rose. Today, it is expected to mainly consolidate at highs.

Overnight, the most-traded SHFE zinc 2608 contract opened at 24,955 yuan/mt. At the open, SHFE zinc briefly dipped to a low of 24,835 yuan/mt. Then bulls increased positions, and SHFE zinc rose to a high of 25,035 yuan/mt. It finally settled up at 24,915 yuan/mt, up 120 yuan/mt, or 0.48%. Trading volume fell to 48,593 lots, and open interest increased by 3,787 lots to 84,775 lots. Overnight, SHFE zinc formed a small bearish candlestick. Macro sentiment improved, and driven by the overseas market, SHFE zinc’s center moved higher. However, domestic consumption remained weak, and SHFE zinc pulled back at the end of the session. Today, SHFE zinc is expected to consolidate at highs.

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