Easing Recession Concerns Drive Zinc Prices Up Domestically and Overseas [SMM Zinc Morning Comment Aug 9]

Overnight, the U.S. initial jobless claims data for the week came in lower than expected, easing market recession concerns. The President of the Kansas City Federal Reserve stated that the labour market remains healthy and that policy adjustments would be appropriate if inflation continues to be subdued. Sources indicated that Iran might reassess whether to launch a military strike on Israel, and Hezbollah might strike Israel independently. President Putin signed a law legalizing cryptocurrency mining in Russia. A 7.4 magnitude earthquake occurred near Kyushu Island, Japan. The Ministry of Finance will issue the fourth tranche of 2024 RMB bonds in the Hong Kong Special Administrative Region, with an issuance size of 9 billion yuan.

Overnight, LME zinc opened at $2,562/mt. At the beginning of the session, LME zinc narrowly fluctuated along the average daily line. During European trading hours, an increase in short positions pushed LME zinc up quickly, with the focus shifting to around $2,620/mt. Entering the night session, LME zinc surged again, reaching a high of $2,658.5/mt at the end of the trading session, and closed at $2,643/mt, up $80/mt, or 3.12%. Trading volume increased to 11,627 lots, and open interest decreased by 1,533 lots to 221,000 lots. Overnight, LME zinc turned positive, with the KDJ indicator expanding upwards. LME inventory decreased by 2,350 mt to 242,025 mt, a drop of 0.96%. The reduction in LME inventory was recorded. Overnight, the U.S. initial jobless claims for the previous week fell more than expected, easing market recession concerns, stabilizing market sentiment, and prompting shorts to exit, leading to a rebound in LME zinc.

Overnight, the most-traded SHFE zinc 2409 contract opened higher at 22,030 yuan/mt. With shorts exiting, SHFE zinc followed the average daily line and moved up steadily, with the focus shifting to 22,270 yuan/mt. At the end of the trading session, SHFE zinc accelerated its rise, reaching a high of 22,440 yuan/mt, and closed at 22,395 yuan/mt, up 515 yuan/mt, or 2.35%. Trading volume decreased to 102,000 lots, and open interest decreased by 1,448 lots to 79,714 lots. Overnight, SHFE zinc recorded a large bullish candlestick, with the daily K-line focus shifting upwards, and the 5-day moving average forming support below. Overnight, market sentiment improved, driving zinc prices up both domestically and overseas. Additionally, the tight supply situation on the zinc supply side continued, with social inventory continuing to deplete, providing strong fundamentals support, leading to a strong zinc price trend.