LME Zinc Surge Drives SHFE Zinc Rise [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,471/mt, marking the intraday low. Bulls then added positions, driving LME zinc steadily higher to touch a high of $3,549/mt near the close, ultimately settling up at $3,548/mt, a gain of $75.5/mt or 2.17%. Trading volume declined to 9,993 lots, while open interest rose by 2,517 lots to 271,000 lots. Last Friday, LME zinc formed a bullish candlestick with no lower shadow. A weak US employment report cooled market expectations for near-term rate hikes by the US Fed, the dollar softened, and base metals prices broadly rose. The center of LME zinc shifted higher. It is expected to consolidate today.

Last Friday, the most-traded SHFE zinc 2608 contract opened at 24,400 yuan/mt. In early trading, SHFE zinc briefly dipped to a low of 24,340 yuan/mt before bulls added positions, causing it to drift higher and touch a high of 24,495 yuan/mt near the close, finally settling up at 24,470 yuan/mt, a gain of 175 yuan/mt or 0.72%. Trading volume decreased to 45,864 lots, while open interest rose by 494 lots to 90,804 lots. Last Friday, SHFE zinc recorded a small bullish candlestick. The pullback in rate hike expectations outside China persisted, the tight domestic ore supply remained unchanged, and TCs continued to decline. The strong support for zinc prices was evident. Driven by the LME, the center of SHFE zinc shifted higher. It is expected to consolidate today.

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