Fluctuating Trend Remains Unchanged, SHFE Zinc Records a Bullish Candle [SMM Zinc Morning Comment]

Last Friday, Russia might agree to use $300 billion in frozen funds to rebuild Ukraine; the White House stated that Trump was confident in completing negotiations on the Russia-Ukraine conflict by Monday, but Zelensky denied this and responded strongly; Iraq denied reports that the US pressured Iraq to resume Kurdish oil exports; Berkshire's Q4 cash position rose to a record high of $334.2 billion, and Buffett issued a shareholder letter stating that the majority of funds would always be invested in stocks; the German Union Party's chancellor candidate announced the party's victory in the Bundestag elections; senior US military officials were consecutively dismissed; the 2025 Central Document No. 1 proposed orderly advancing the pilot program to extend land contracts for another 30 years after the expiration of the second round; Vice Premier Lifeng He held a video call with US Treasury Secretary Janet Yellen; the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council deployed a special action to deepen the "AI+" initiative among central state-owned enterprises; the Ministry of Human Resources and Social Security responded to "social security contributions for food delivery riders," stating that policies to lower thresholds and provide subsidies for insurance participation are being actively studied and improved, aiming to include workers in new industries under social security coverage.

Last Friday, LME zinc opened at $2,917.5/mt. In early trading, it increased slightly to a high of $2,940/mt, then fluctuated downward to a low of $2,881.5/mt. During European trading hours, bulls increased positions, driving LME zinc to rebound from the low and rise steadily, ultimately closing down at $2,920/mt, a decrease of $3/mt or 0.10%. Trading volume fell to 71,886 lots, while open interest increased by 2,715 lots to 230,000 lots. Last Friday, LME zinc formed a bullish candlestick, with the upper Bollinger Bands providing resistance and the 10-day and 40-day moving averages offering support below. On February 21, LME zinc inventory decreased by 2,675 mt to 153,600 mt, a decline of 1.71%. Recently, international regional tensions have shown signs of easing, slightly boosting market confidence. Meanwhile, overseas inventories continued to decline, supporting the upward movement of LME zinc.

Last Friday, the most-traded SHFE zinc 2504 contract opened at 23,980 yuan/mt. In early trading, bulls increased positions, pushing SHFE zinc to fluctuate upward above the daily moving average, with the center oscillating around 24,100 yuan/mt. Later, shorts increased positions, causing SHFE zinc to decline rapidly, but additional long positions helped it recover losses and reach a high of 24,160 yuan/mt. By the end of trading, it dropped back slightly, closing up at 24,130 yuan/mt, an increase of 110 yuan/mt or 0.46%. Trading volume decreased to 53,721 lots, while open interest rose by 4,241 lots to 81,772 lots. Last Friday, SHFE zinc formed a bullish candlestick, with the 40-day and 60-day moving averages providing resistance above and the 10-day and 20-day moving averages offering support below. Fundamentally, domestic spot supply increased slightly, and downstream consumption continued to gradually return to normal. On the macro front, market sentiment has been relatively positive recently, but downstream consumption has not fully recovered, suggesting that zinc prices are likely to continue fluctuating in the current trend.