China's supply-demand imbalance persists, SHFE zinc continues to consolidate at highs [SMM zinc morning comment]

Published: Jul 29, 2026 08:56

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[SMM Zinc Morning Comment] Overnight, the most-traded SHFE zinc 2609 contract opened lower with a gap at 24,660 yuan/mt. In early trading, SHFE zinc consolidated around the daily average line, dipping to a low of 24,595 yuan/mt. Subsequently, bears reduced positions, pushing the price up to a high of 24,770 yuan/mt. At the end of the session, gains narrowed and the price maintained a fluctuating trend, finally closing down at 24,720 yuan/mt, down 60 yuan/mt or 0.24%. Trading volume decreased to 51,828 lots, and open interest fell by 2,582 lots to 109,000 lots.

Overnight, LME zinc opened at $3,611/mt, briefly touching a high of $3,611.5/mt at the beginning of the session, then the price drifted lower throughout, dipping to a low of $3,558/mt during the night session. Towards the end, LME zinc edged up to recoup some of its losses, finally settling lower at $3,567.5/mt, down $47.5/mt, a decline of 1.31%. Trading volume increased to 11,890 lots, while open interest increased by 1,807 lots to 251,000 lots. Overnight, LME zinc recorded a large bearish candlestick, with the 40-day and 60-day moving averages below providing support. Although zinc inventory outside China continued to decline, geopolitical uncertainty in the Middle East persisted, and the US dollar index rose first and then fell yesterday, the center of LME zinc moved lower.

Overnight, the most-traded SHFE zinc 2609 contract opened lower with a gap at 24,660 yuan/mt. At the beginning of the session, SHFE zinc consolidated around the daily moving average, dipping to a low of 24,595 yuan/mt. Then bears reduced positions, pushing the price up to a high of 24,770 yuan/mt. Towards the end, gains narrowed and it maintained a fluctuating trend, finally settling lower at 24,720 yuan/mt, down 60 yuan/mt, a decline of 0.24%. Trading volume decreased to 51,828 lots, while open interest decreased by 2,582 lots to 109,000 lots. Overnight, SHFE zinc recorded a small bullish candlestick, with the lower Bollinger Band below providing support. End-use consumption remained in the doldrums, the spot market was sluggish, and social inventory continued to consolidate at highs. However, the tight ore supply pattern still provided support to prices, and SHFE zinc consolidated at highs.

Data source statement: Data other than public information are processed by SMM based on public information, market communication, and SMM internal database models. They are for reference only and do not constitute any investment 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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