Hawkish Signals Pressure LME Zinc to Retreat after Rapid Rise, SHFE Zinc Expected to Consolidate at Highs Intraday [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,889.5/mt, drifted higher and hit a high of $3,955/mt, then quickly pulled back and hit a low of $3,859.5/mt, and finally closed at $3,879.5/mt, down $9/mt, a decline of 0.23%. Trading volume increased to 20,691 lots, and open interest increased by 64 lots to 261,000 lots. On August 28, LME zinc inventory increased by 75 mt to 97,950 mt, up 0.08%; last Friday, LME zinc recorded a small bearish candlestick with a long upper shadow. The Fed Chairman sent a hawkish signal at the Jackson Hole meeting. Market expectations for a September rate hike increased, and the US dollar and Treasury yields strengthened, which weighed on nonferrous metals. LME zinc shot up to a high and then quickly pulled back.

Last Friday, the SHFE zinc 2610 contract opened at 26,240 yuan/mt. In early trading, it dipped to 26,145 yuan/mt, then rebounded in volatile trading and hit a high of 26,400 yuan/mt, and finally closed at 26,375 yuan/mt, down 110 yuan/mt, a decline of 0.42%. Trading volume increased to 112,400 lots, and open interest decreased by 335 lots to 164,000 lots. Last Friday, SHFE zinc recorded a bullish candlestick. LME zinc's retreat after a rapid rise weighed on SHFE zinc; subsequently, LME zinc stabilized at low levels, and SHFE zinc recovered in tandem. Although China's consumption showed mediocre performance, SHFE zinc is currently heavily influenced by LME movements and is expected to continue to consolidate at highs intraday.

Data source statement: Except for public information, all other data are derived by SMM based on public information, market communication, and SMM's internal database models. They are for reference only and do not constitute decision-making advice.