China Inventory Continued to Increase, Market Intertwined with Bullish and Bearish Factors [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,365/mt. Early in the session, LME zinc dipped slightly to $3,357/mt, then prices continued to rise, reaching a high of $3,442/mt. Late in the session, prices pulled back slightly from highs and moved sideways, ultimately closing up at $3,409.5/mt, up $51/mt or 1.52%. Trading volume increased to 101,000 lots, and open interest increased by 4,648 lots to 236,000 lots. On May 6, LME zinc inventory decreased by 1,450 mt to 94,800 mt. Overnight, LME zinc posted a bullish candlestick, with the 40/60-day moving averages providing support below. Renewed hopes for US-Iran negotiations further eased inflation concerns and upward pressure on interest rates. Meanwhile, inventories outside China continued to decline, supporting the center of LME zinc prices to move higher.

Overnight, the most-traded SHFE zinc 2606 contract opened lower with a gap at 24,180 yuan/mt. Early in the session, SHFE zinc experienced small fluctuations downward, touching a low of 24,125 yuan/mt. Subsequently, bears reduced positions, and prices fluctuated upward above the daily moving average, reaching a high of 24,250 yuan/mt. Late in the session, prices moved sideways, ultimately closing down at 24,205 yuan/mt, down 45 yuan/mt or 0.19%. Trading volume decreased to 37,900 lots, and open interest decreased by 1,278 lots to 92,124 lots. According to SMM market communication, as of May 6, China's inventory increased by 3,300 mt to 255,900 mt. Overnight, SHFE zinc posted a small bullish candlestick, with various moving averages below providing support. After the holiday, China's social inventory continued to rise. Meanwhile, the spot market recently showed lackluster activity due to invoice-related issues. Resistance remained above zinc prices, but TCs hovering at lows provided bottom support for zinc prices. SHFE zinc maintained a fluctuating trend.

Data source disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.