Fundamentals Show Gradual Weakening in Consumption, SHFE Zinc Center Slightly Moves Downward [SMM Zinc Morning Comment]

Overnight, Trump signed more than 40 presidential executive orders on his first day in office; TASS: Preparations for a phone call between Putin and Trump have not yet begun; Canadian Prime Minister Trudeau: Supports the idea of a 1-to-1 retaliation against US tariffs; Japanese media: The Bank of Japan is moving toward a rate hike at this week's meeting; Central Huijin increased its holdings in broad-based ETFs in Q4 last year; Ministry of Human Resources and Social Security: Appropriately increase the basic pensions for retirees, with more inclination toward low- and middle-income groups; Ministry of Industry and Information Technology (MIIT): Studying the establishment of the second phase of the National SME Development Fund.

Overnight, LME zinc opened at $2,958/mt. At the beginning of the session, LME zinc fluctuated around the daily moving average. During the European trading hours, it plunged downward, and in the night session, its center moved upward, fluctuating around $2,930/mt. By the end of the session, LME zinc continued to decline, hitting a low of $2,906/mt and closing down at $2,911/mt, a decrease of $46/mt or 1.56%. Trading volume increased to 80,676 lots, while open interest decreased by 1,330 lots to 222,000 lots. Overnight, LME zinc recorded a large bearish candlestick, with resistance from the 40- and 60-day moving averages above and support from the 10-day moving average below. On January 21, LME zinc inventories decreased by 4,000 mt to 195,125 mt, a drop of 2.01%. Zinc prices continued to fluctuate due to uncertainties surrounding Trump's policies, while the reduction in overseas inventories still provided some support for zinc prices.

Overnight, the most-traded SHFE zinc 2503 contract opened at 24,130 yuan/mt. At the beginning of the session, SHFE zinc fluctuated around the daily moving average, reaching a high of 24,220 yuan/mt. Subsequently, with increased short positions, SHFE zinc fluctuated downward below the daily moving average, hitting a low of 24,060 yuan/mt and closing down at 24,085 yuan/mt, a decrease of 115 yuan/mt or 0.48%. Overnight, SHFE zinc recorded a bearish candlestick, with resistance from the 20- and 60-day moving averages above and support from the 10-day moving average below. Most downstream enterprises have already entered the holiday phase, and consumption is gradually weakening. However, macro front news should continue to be monitored, and zinc prices are expected to maintain a fluctuating trend in the short term.