SHFE zinc continues to consolidate at highs, focus on subsequent export performance [SMM Zinc Morning Comment]

SMM August 5 News:

Overnight, LME zinc opened at $3,642/mt and drifted higher throughout the session. In early trading, it dipped to an intraday low of $3,635/mt, then touched an intraday high of $3,684.5/mt near the session’s end, finally closing up at $3,661/mt, a gain of $27/mt, or 0.74%. Trading volume decreased to 11,194 lots, while open interest rose by 3,197 lots to 248,000 lots. Overnight, LME zinc formed a bullish candlestick, with support from the 5-day moving average below. The US Treasury Secretary indicated the Strait of Hormuz may reopen soon, easing market inflation concerns. Combined with steadily declining LME zinc ingot inventory on the fundamentals side, continued buying by bulls boosted zinc prices, causing the LME zinc price center to rise further. It is expected to stay high.

Overnight, the most-traded SHFE zinc 2609 contract opened at 25,110 yuan/mt, then fluctuated higher to touch a session high of 25,270 yuan/mt. Subsequently, it consolidated while trending higher above the daily moving average. Near the session’s end, SHFE zinc edged lower to a low of 25,100 yuan/mt, eventually closing up at 25,165 yuan/mt, a gain of 90 yuan/mt, or 0.36%. Trading volume increased to 66,219 lots, while open interest fell by 2,579 lots to 115,000 lots. Overnight, SHFE zinc formed a bullish candlestick, with resistance from the upper Bollinger Band. Supported by the LME trend, SHFE zinc continued to rise during the night session, but its overall consolidation at highs was maintained, dragged by off-season consumption in China. Attention should be paid to future zinc ingot export performance.

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