Zinc Price Center Moved Higher Due to a Significant Increase in LME Cancelled Warrants [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,288/mt. After briefly consolidating around the daily average at the start of the session, the center of LME zinc moved lower all the way down, hitting a low of $3,215.5/mt during European trading hours. It then fluctuated upward for a recovery, touching a high of $3,299/mt in the night session, before pulling back again toward the close and finally ending down at $3,256.5/mt, down $27/mt, or 0.82%. Trading volume increased to 15,694 lots, and open interest increased by 844 lots to 211,000 lots. Overnight, LME zinc stopped rising and started to fall, with the middle Bollinger Bands line below providing support. As expectations for a rapid end to the Middle East conflict cooled, base metals generally fell. Zinc posted a relatively smaller decline due to a substantial increase in LME registered warrants. After the holiday, attention should be paid to changes in LME inventory.

Overnight, the most-traded SHFE zinc 2605 contract opened at 23,740 yuan/mt. At the start of the session, SHFE zinc fluctuated upward and touched a high of 23,815 yuan/mt. Subsequently, as bulls reduced positions and exited, SHFE zinc plunged lower and hit a low of 23,640 yuan/mt toward the close, finally ending down at 23,645 yuan/mt, down 90 yuan/mt, or 0.38%. Trading volume decreased to 44,094 lots, while open interest increased by 343 lots to 83,944 lots. Overnight, SHFE zinc recorded a third consecutive losing session, but the center of the daily candlestick moved higher, with the middle Bollinger Bands line above providing resistance. Due to a substantial increase in LME cancelled warrants and concerns over declining domestic TCs, the center of zinc prices moved higher, but the increase in social inventory limited the gains.

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