SMM zinc ingot inventory declined slightly, SHFE zinc rebounded from lows during the night session [SMM Zinc Morning Comment]

SMM, July 17:

Overnight, LME zinc opened at $3,552.5/mt, and then drifted higher throughout the session. It dipped to a low of $3,548.5/mt in early trading, touched a high of $3,596/mt near the close, and finally settled up at $3,581/mt, gaining $29.5/mt, or 0.83%. Trading volume decreased to 9,049 lots, while open interest added 548 lots to 255,000 lots. LME zinc posted a bullish candlestick overnight, with support from the 40-day moving average below. On the macro front, geopolitical conflicts outside China persist, but on the fundamentals side, LME zinc ingot inventory continued to draw down, and the tightness in ex-China ore supply remained. Overall, LME zinc rebounded slightly from lows, and is expected to maintain a fluctuating trend in the short term.

Overnight, the most-traded SHFE zinc 2609 contract opened at 24,645 yuan/mt, and also drifted higher throughout the session. It dipped to a low of 24,590 yuan/mt in early trading, touched a high of 24,815 yuan/mt near the close, and finally settled up at 24,765 yuan/mt, rising 65 yuan/mt, or 0.26%. Trading volume decreased to 32,753 lots, while open interest increased by 1,667 lots to 92,973 lots. SHFE zinc posted a bullish candlestick overnight, with support from the 40-day moving average below. The rebound in the LME market lifted the domestic night session from lows. On the fundamentals side, SMM zinc ingot inventory edged down WoW, and SHFE zinc is expected to remain in a consolidation pattern overall.

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