Inflation concerns resurge, SHFE zinc stops rising and starts to fall [SMM Zinc Morning Comment]

Published: Jul 24, 2026 08:55

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[SMM SHFE Zinc Morning Comment] Overnight, SHFE zinc stopped rising and started to fall, with the KDJ gap widening upwards. Amid escalating geopolitical conflicts in the Middle East, concerns over economic downturn triggered by inflation worries grew, while China's social inventory increased again. Poor consumption also encountered resistance from above, with zinc prices mainly fluctuating within a range...

Overnight, LME zinc opened at $3,590/mt, initially drifting higher along its daily moving average, with its center moving up to around $3,610/mt to consolidate. Approaching the night session, it peaked at $3,621.5/mt before bears added to positions, pressuring LME zinc to drift lower in a continuous decline, hitting a low of $3,576/mt late in the session. It ultimately closed down at $3,580/mt, down $5/mt, or 0.14%. Trading volume increased to 12,341 lots, and open interest rose by 929 lots to 249,000 lots. Overnight, LME zinc formed a bearish candlestick with a long upper shadow, but its center moved higher, with support provided by moving averages below. Overnight, affected by US-Iran tensions, the US dollar index fell first and then rose, causing LME zinc to retreat after a rapid rise, but overall movement remained strong, mainly due to continuous decreases in LME inventory and the LME Cash-3M backwardation structure widening to $41.92/mt. Going forward, attention should be paid to actual export volumes and macro sentiment changes.

Overnight, the most-traded SHFE zinc 2609 contract opened at 24,825 yuan/mt, initially running near the daily moving average to hit a high of 24,880 yuan/mt. Subsequently, bulls took profits and left the market, causing SHFE zinc to decline, touching a low of 24,710 yuan/mt. Its center saw a slight recovery late in the session, ultimately closing down at 24,760 yuan/mt, down 55 yuan/mt, or 0.22%. Trading volume decreased to 44,632 lots, and open interest fell by 2,266 lots to 110,000 lots. Overnight, SHFE zinc stopped rising and started to fall, with the KDJ indicator gap widening upward. Overnight, escalating geopolitical conflicts in the Middle East triggered inflation concerns, and thus, concerns about an economic downturn. Meanwhile, China's social inventory increased again, and with poor consumption, the market encountered resistance. Zinc prices primarily moved within a range.

Data Source Statement: Except for publicly available information, other data is based on public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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