Supply Concerns Intensify, SHFE Zinc Rises [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,437/mt. In early trading, LME zinc fluctuated downward, hitting a low of $3,405/mt during European trading hours. Subsequently, bulls increased their positions, and LME zinc fluctuated upward throughout the session, touching a high of $3,488/mt near the close, ultimately settling up at $3,482/mt, a gain of $41/mt or 1.19%. Trading volume rose to 11,012 lots, and open interest increased by 1,090 lots to 241,000 lots. Overnight, LME zinc posted a long lower-shadow bullish candlestick. Ongoing US-Iran tensions continued to keep energy supply risks lingering, and Peru issued an emergency decree on the energy crisis, intensifying market concerns over supply deficit. LME zinc rallied, and is expected to hold up well today.

Overnight, the most-traded SHFE zinc 2606 contract opened at 24,255 yuan/mt. In early trading, bulls increased their positions, and SHFE zinc fluctuated upward throughout the session, touching a high of 24,550 yuan/mt before trading in a range, ultimately settling up at 24,445 yuan/mt, a gain of 360 yuan/mt or 1.49%. Trading volume fell to 76,020 lots, and open interest increased by 4,663 lots to 88,353 lots. Overnight, SHFE zinc posted a bullish candlestick. Macro sentiment turned bullish, tight supply sentiment intensified, compounded by zinc concentrate TCs in China falling to historical lows. SHFE zinc rallied, and is expected to hold up well today.

Data source disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.