Supply-side pressure suppresses zinc prices, SHFE zinc maintains fluctuating trend [SMM Zinc Morning Comment]

SMM News on June 4:

Overnight, LME zinc opened at $2,692/mt. After opening, LME zinc prices declined all the way, hitting a low of $2,658/mt before rebounding and rising. They reached a high of $2,711.5/mt at the close of the session, ultimately closing up at $2,711.5/mt, up $18.5/mt or 0.69%. Trading volume decreased to 11,422 lots, while open interest fell by 64 lots to 213,000 lots. Overnight, LME zinc recorded a long lower shadow bullish candlestick, with the 40-day moving average providing support below. Renewed tariff uncertainties and a strengthening US dollar index from lows weighed on zinc prices. However, with continuous destocking at the LME, LME zinc prices rebounded during the session amid low inventory support.

Overnight, the most-traded SHFE zinc 2507 contract opened at 22,260 yuan/mt. In early trading, SHFE zinc hit a low of 22,260 yuan/mt, then fluctuated upward to reach a high of 22,435 yuan/mt. Subsequently, SHFE zinc pulled back from highs to near the daily average line, maintaining a narrow fluctuating trend. It ultimately closed up at 22,355 yuan/mt, up 175 yuan/mt or 0.79%. Trading volume decreased to 88,953 lots, while open interest fell by 1,589 lots to 121,000 lots. Overnight, SHFE zinc recorded a long upper shadow bullish candlestick, with the 60-day moving average providing support below. Driven by the LME market, zinc prices rose somewhat during the night session. However, with refined zinc production in June expected to increase significantly MoM, zinc price gains were limited under supply-side pressure, basically maintaining a fluctuating trend.