Progress Made in China-U.S. Trade Talks, LME Zinc Records Long Lower Shadow Bullish Candlestick [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,649.5/mt. In the early session, LME zinc fluctuated downward along the daily average line, hitting a low of $2,631/mt near the European trading session. Subsequently, the price center returned near the daily average line and moved up to around $2,655/mt towards the end of the session, closing at $2,658.5/mt, up $4.5/mt or 0.17%. Trading volume decreased by 7,127 lots, and open interest decreased by 4,342 lots to 213,000 lots. Overnight, LME zinc turned positive after a decline, with the lower Bollinger Bands providing support. The preliminary agreement on the Geneva framework in the China-US trade negotiations improved macro sentiment, and zinc prices recorded a bullish candlestick with a long lower shadow.

Overnight, the most-traded SHFE zinc 2507 contract opened at 21,900 yuan/mt. In the early session, SHFE zinc quickly touched a high of 21,965 yuan/mt. Subsequently, as bulls reduced their positions and exited the market, the price center of SHFE zinc moved down below the daily average line. Towards the end of the session, it slightly recovered upwards, closing at 21,925 yuan/mt, up 55 yuan/mt or 0.25%. Trading volume decreased to 52,268 lots, and open interest decreased by 2,031 lots to 133,000 lots. Overnight, SHFE zinc recorded a small bullish candlestick, with the 5-day moving average acting as resistance above and the lower Bollinger Bands providing support below. Progress in the China-US trade negotiations improved macro sentiment. However, the fundamentals provided insufficient support for zinc, and it is recommended to remain on the sidelines in the short term.