Improved Macro Sentiment Lifted the Center of SHFE Zinc in Line With LME Zinc [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,233/mt. In early trading, LME zinc extended its decline below the daily average line, touching a low of $3,193.5/mt during European trading hours. It then rose all the way as bears reduced positions and exited the market. By the close, the center had shifted up to around $3,290/mt, and it finally closed higher at $3,283.5/mt, up $69.5/mt, or 2.16%. Trading volume increased to 15,440 lots, while open interest decreased by 205 lots to 210,000 lots. Overnight, LME zinc posted a four-day winning streak, with the daily candlestick center moving higher. Trump released a TACO signal, expectations for an end to the geopolitical conflict in the Middle East increased, the US dollar index fell, and base metals saw bullish positioning. Zinc inventory remained low, and bears' exit pushed zinc prices higher throughout the session. Attention should be paid to Trump's remarks today.

Overnight, the most-traded SHFE zinc 2605 contract opened at 23,635 yuan/mt. In early trading, SHFE zinc fluctuated around the daily average line before bulls added positions and pushed the center steadily higher. It touched a high of 23,935 yuan/mt near the close and finally closed higher at 23,895 yuan/mt, up 300 yuan/mt, or 1.27%. Trading volume decreased to 60,197 lots, while open interest increased by 941 lots to 89,872 lots. Overnight, SHFE zinc posted a small bullish candlestick, and the daily candlestick center moved higher again, with the middle Bollinger Bands forming resistance above. Overnight, amid expectations that the geopolitical conflict may end, China followed outside China in moving higher. However, judging from current spot trading, as zinc prices rose, downstream pricing activity weakened. Coupled with frequent macro changes, it was not advisable to chase long positions excessively in zinc prices ahead of the holiday, and staying on the sidelines was recommended.

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