Social inventory accumulation rises again, limiting the rise in zinc prices [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,560/mt. Early in the session, after a brief spike, it dipped to a low of $3,546.5/mt. Subsequently, driven by bargain-hunting buying from bulls, LME zinc fluctuated upward throughout, touching a high of $3,619.5/mt in the night session. Towards the end, the center edged slightly lower, and it eventually settled up at $3,602/mt, a gain of $47/mt, or 1.32%. Trading volume increased to 12,125 lots, and open interest grew by 3,291 lots to 261,000 lots. Overnight, LME zinc formed a bullish candlestick, with support from the 10-day and 20-day moving averages below and resistance from the upper Bollinger Band above. Preliminary US-Iran negotiations may pave the way for a peace agreement, reviving optimistic sentiment, and LME zinc held up well.

Overnight, the most-traded SHFE zinc 2608 contract opened at 24,920 yuan/mt. During the session, SHFE zinc fluctuated around the daily moving average, with intraday swings of less than 200 yuan/mt. It eventually settled up at 24,855 yuan/mt, up 130 yuan/mt, or 0.53%. Trading volume decreased to 53,690 lots, while open interest rose by 5,286 lots to 102,000 lots. Overnight, SHFE zinc posted three consecutive bearish candlesticks, but the center of the daily candlestick shifted higher, with support from the middle Bollinger Band below. Overnight, driven by the external market, SHFE zinc fluctuated at highs. However, weak downstream consumption led to an increase in social inventory to 275,200 mt, capping the upside for zinc prices.

Data source statement: All data, other than publicly available information, are processed by SMM based on public information, market communication, and SMM's internal database models. They are for reference only and do not constitute decision-making advice.