Domestic social inventory continue to accumulate, SHFE zinc is weak [SMM zinc morning comment]

LME zinc opened at $2465/mt yesterday evening, and hit a high of $2465.5/mt before falling back to $2416/mt, and closed at $2425/mt, a decrease of $26.5/mt or 1.08%. Trading volume decreased to 9888 lots, and open interest grew 2021 lots to 224,000 lots. LME zinc inventory decreased by 1050 mt or 0.53% to 197275 mt. The owner of Russia's Ozernoye zinc mine said that the mine has postponed the start-up of zinc concentrate until at least the third quarter of this year. The delay in production has intensified the market's expectations for long-term shortages at the mine end. However, the U.S. ISM service industry index rose to 53.4 in January. , hitting a four-month high, strong economic data continues to dampen market expectations for interest rate cuts by the Federal Reserve, and macro bearish sentiment has revived. Grupo Mexico's fourth quarter report for 2023 revealed that its Buenavista zinc project will begin operations in the first quarter of 2024.

The most active SHFE 2403 zinc contract opened at 20520 yuan/mt and fell 15 yuan/mt or 0.07% to close at 20520 yuan/mt trading with the high-end of 20585 yuan/mt and the low-end of 20485 yuan/mt. Trading volumes decreased to 26821 lots and open interest grew 706 lots to 80131 lots. Inventories in seven SMM markets in China recorded 89,900 tons, an increase of 7,500 tons from the previous week. Domestic social warehouses continued to accumulate, and the support for zinc prices from inventories weakened. Shanghai zinc was weak and fluctuated.