SHFE Zinc Posted Six Consecutive Gains, with the Center of the Daily Candlestick Moving Upward [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,107/mt. After briefly consolidating around the daily average at the start of the session, bears reduced positions and exited, driving LME zinc all the way higher to trade above the daily average. It touched a high of $3,192/mt near the close and finally ended up at $3,182/mt, up $75.5/mt, or 2.43%. Trading volume increased to 11,831 lots, while open interest decreased by 142 lots to 209,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the 20-day moving average above forming resistance. Overnight, dovish remarks from the US Fed boosted market sentiment, while LME Cash-3M shifted to a B structure. As bears reduced positions and exited, LME zinc remained strong.

Overnight, the most-traded SHFE zinc 2605 contract opened at 23,625 yuan/mt. After briefly consolidating around the daily average at the start of the session, the center of SHFE zinc moved lower and dipped to 23,515 yuan/mt. Subsequently, as bears exited, the center of SHFE zinc moved back above the daily average, and it finally closed up at 23,650 yuan/mt, up 230 yuan/mt, or 0.98%. Trading volume decreased to 39,180 lots, while open interest decreased by 1,143 lots to 96,212 lots. Overnight, SHFE zinc posted a sixth consecutive gain, with the center of the daily candlestick moving higher. The 20-day moving average below provided support, while the 40-day and 60-day moving averages above formed resistance. Overnight, zinc prices hold up well, supported by supply-side costs. Downstream consumption continued destocking, but macro sentiment remained choppy, and zinc prices are expected to fluctuate at highs.

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