SHFE Zinc Posted a Five-Day Winning Streak, with Its Center Edging Up Slightly [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,074.5/mt. In early trading, it extended its rise along the daily average and climbed to a high of $3,125/mt. Subsequently, as bulls took profits and exited, LME zinc fell all the way and touched a low of $3,071/mt near the night session. As bears reduced positions and exited, LME zinc rose again, with its center moving up to around $3,110/mt, and finally closed higher at $3,106.5/mt, up $33/mt, or 1.07%. Trading volume decreased to 9,425 lots, and open interest fell by 1,767 lots to 209,000 lots. Last Friday, LME zinc recorded a small bullish candlestick, with the 10-day average above forming resistance. Although there was still a risk of escalation in the geopolitical conflict in the Middle East last Friday and macro sentiment was weak, concerns over mine-side energy supply arising from such escalation also increased, lending strength to zinc prices.

Last Friday, the most-traded SHFE zinc 2605 contract opened lower with a gap at 23,250 yuan/mt. In early trading, SHFE zinc quickly moved lower to a low of 23,190 yuan/mt. Subsequently, increased long positions by bulls pushed SHFE zinc all the way up to a high of 23,415 yuan/mt, after which its center edged slightly lower. It finally closed higher at 23,370 yuan/mt, up 115 yuan/mt, or 0.49%. Trading volume decreased to 3,354 lots, and open interest fell by 331 lots to 100,000 lots. Last Friday, SHFE zinc recorded a five-day winning streak, with the 5/10-day averages below providing support. In April, routine maintenance at smelters increased, and inventory continued destocking, improving zinc fundamentals, but weak macro sentiment capped its gains.

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