Fundamentals Show Both Bullish and Bearish Factors, SHFE Zinc Consolidates at Highs [SMM Zinc Morning Comment]

SMM July 13:

Last Friday, LME zinc opened at $3,616.5/mt. After the opening, it drifted higher, hitting a high of $3,637.5/mt before pulling back all the way. Near the night session, LME zinc dipped to a low of $3,580/mt, then bounced back to near the daily average line from the low. It finally closed down at $3,611.5/mt, down $4.5/mt or 0.12%. Trading volume decreased to 12,329 lots, and open interest decreased by 469 lots to 268,000 lots. Last Friday, LME zinc recorded a bearish candlestick, with the 5-day moving average below providing support. Reignited US-Iran tensions exacerbated market inflation expectations, and the US dollar index rose from a low, putting pressure on nonferrous metals. However, LME zinc inventories continued to decline, providing some support for zinc prices. LME zinc continued to consolidate at highs.

Last Friday, the most-traded SHFE zinc 2608 contract opened at 24,790 yuan/mt. Early in the session, it dipped to a low of 24,780 yuan/mt. After the opening, it drifted higher, hitting a high of 24,945 yuan/mt, then pulled back to near the daily average line, maintaining a consolidation pattern. It ended flat at 24,865 yuan/mt. Trading volume decreased to 37,825 lots, and open interest decreased by 1,143 lots to 82,938 lots. Last Friday, SHFE zinc recorded a bullish candlestick, with the 5-day moving average below providing support. China's zinc concentrate TCs remained persistently low, and the tight ore supply situation in the market has not improved yet. Meanwhile, zinc ingot inventories also showed no significant destocking. Fundamentals were mixed with both bullish and bearish factors, and SHFE zinc maintained a consolidation pattern.

Data source statement: All data other than public information is based on public information, market communication, and SMM's internal database model, processed by SMM, for reference only and does not constitute decision-making advice.