SHFE zinc still has support below, and is expected to consolidate on a strong note in the short term [SMM Zinc Morning Comment].

Overnight, LME zinc opened at $3,569.5/mt. Early in the session, LME zinc attempted to rise above the daily moving average but met resistance and pulled back to a low of $3,555/mt. Subsequently, LME zinc consolidated and shot up to touch a high of $3,594/mt. Entering the night session, LME zinc consolidated lower, fluctuating near the daily moving average, finally settling up at $3,573/mt, up $5.5/mt, a gain of 0.15%. Trading volume decreased to 7,361 lots, and open interest decreased by 4,171 lots to 246,900 lots. Overnight, LME zinc formed a bullish candlestick with a long upper shadow, with the 40-day and 60-day moving averages below providing support. Trump stated he would strike Iran in response to attacks on U.S. troops in the Middle East; risks in the Middle East remained, but the US Fed announced it would keep interest rates unchanged, coupled with LME zinc inventories continuing to decline, the center of LME zinc prices moved higher.

Overnight, the most-traded SHFE zinc 2609 contract opened at 24,750 yuan/mt. Early in the session, SHFE zinc shot up to touch a high of 24,760 yuan/mt. Subsequently, as bulls reduced positions, the price consolidated and pulled back, dipping to 24,655 yuan/mt. At the end of the session, bears reduced positions, causing the price to rebound slightly and move sideways, finally settling down at 24,690 yuan/mt, down 75 yuan/mt, a decline of 0.30%. Trading volume decreased to 34,929 lots, and open interest decreased by 1,850 lots to 103,000 lots. Overnight, SHFE zinc formed a bearish candlestick, with the 5-day moving average above exerting pressure, while the 40-day moving average below provided support. China zinc concentrate TCs remained in the doldrums and the US Fed held interest rates steady; zinc prices still had some support below, but domestic consumption was weak. Overall, SHFE zinc is expected to consolidate on a strong note in the short term.

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