Bulls and Bears Intertwine as SHFE Zinc Continues to Consolidate at Highs [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,892.5/mt. Early in the session, its center rose and touched a high of $3,933/mt, then it quickly moved lower to test a low of $3,840/mt. Entering the night session, LME zinc recovered part of its losses and rebounded to hover near the daily moving average, finally closing up at $3,888.5/mt, up $3/mt, or 0.08%. Trading volume fell to 19,954 lots, and open interest decreased by 3,680 lots to 261,000 lots. On August 27, LME zinc inventory increased by 550 mt to 97,325 mt, up 0.57%. Overnight, LME zinc shifted from a bullish close to a bearish close, posting a small bearish candlestick, with the 10/60-day moving averages below providing support. Hawkish remarks from three senior US Fed officials, capital outflows, and a continued increase in inventories outside China together slowed LME zinc’s gains, and it continued to consolidate at highs.

Overnight, the most-traded SHFE zinc 2610 contract opened at 26,285 yuan/mt. Early in the session, SHFE zinc briefly touched a high of 26,335 yuan/mt, then prices consolidated and pulled back to test a low of 26,085 yuan/mt. After that, as bears reduced positions, prices rose gradually. It finally closed up at 26,195 yuan/mt, up 55 yuan/mt, or 0.21%. Trading volume fell to 88,137 lots, and open interest decreased by 995 lots to 165,000 lots. Overnight, SHFE zinc posted a small bearish candlestick, with the 10/60-day moving averages below providing support. Yesterday, China’s inventory edged up slightly, and current inventory remained at a high level above 260,000 mt. Prices faced resistance above, but China’s monthly ore TC continued to decline. With bulls and bears intertwined in the Chinese market, the short-term consolidation pattern at highs was expected to remain unchanged.

Data Source Statement: Except for public information, all other data are processed by SMM based on public information, market communication, and SMM’s internal database models, and are for reference only and do not constitute decision-making advice.