LME drives SHFE zinc to record a three-day winning streak [SMM zinc morning comment]

Overnight, LME zinc opened at $3,556/mt. In early trading, it consolidated around the daily average line, dipping to $3,544/mt near the European session. Then, as bears reduced positions and exited, LME zinc drifted higher, with the center moving up to around $3,585/mt for consolidation, during which it touched a high of $3,598/mt. It finally closed up at $3,585/mt, gaining $37/mt, or 1.04%. Trading volume increased to 10,225 lots, while open interest decreased by 2,011 lots to 248,000 lots. Overnight, LME zinc posted a bullish candlestick, with the daily candlestick center moving higher, the MACD indicator turning from negative to positive territory, and the middle Bollinger Band providing support from below. Overnight, geopolitical conflicts in the Middle East escalated, increasing inflation risks, LME zinc inventory continued to decline, the LME Cash-3M backwardation structure widened to $30.16/mt, capital position concentration increased, and LME zinc operated with strength.

Overnight, the most-traded SHFE zinc 2609 contract opened higher with a gap at 24,650 yuan/mt. In early trading, SHFE zinc quickly dipped to 24,610 yuan/mt, then bulls added positions to push its center higher, trading above the daily average line and touching a high of 24,800 yuan/mt. Subsequently, SHFE zinc attempted a downside break but failed, hindered by the daily average line, and its center returned to trade above the line. It finally closed up at 24,765 yuan/mt, gaining 240 yuan/mt, or 0.98%. Trading volume decreased to 53,224 lots, while open interest increased by 4,340 lots to 102,000 lots. Overnight, SHFE zinc recorded a three-day winning streak, with the daily candlestick center moving higher and the moving average lines below providing support. Driven by the overnight LME market, SHFE zinc's center shifted upward. On the fundamentals side, the pattern of tight ore supply and loose ingot supply remains unchanged, TCs fell to historical lows, the SHFE/LME price ratio operated at low levels, zinc ingot exports are expected, and zinc prices have strong support at the bottom.

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