SHFE zinc has strong bottom support and continues to rise [SMM zinc morning comment]

Last Friday, LME zinc opened at $3,903/mt, consolidating briefly in early trading and dipping to a low of $3,902.5/mt. Subsequently, bulls added positions, driving LME zinc sharply higher, with the night session touching a high of $3,957/mt. In late trading, losses narrowed, and it ultimately closed up at $3,940.5/mt, up $43/mt, or 1.10%. Trading volume fell to 13,878 lots, while open interest increased by 2,884 lots to 265,000 lots. Last Friday, LME zinc posted a large bullish candlestick. US August nonfarm payrolls far exceeded market expectations, and the market-implied probability of a US Fed rate hike in September rose to nearly 60%. However, Trump continued to pressure for interest rate cuts, and the US dollar shot up before pulling back. Combined with high LME capital concentration, LME zinc fluctuated at highs. Today, LME zinc is expected to mainly consolidate at highs.

Last Friday, the most-traded SHFE zinc 2610 contract opened at 26,710 yuan/mt, briefly dipping in early trading to a low of 26,675 yuan/mt. Subsequently, bulls added positions, driving SHFE zinc sharply higher, with the session touching a high of 27,040 yuan/mt near the close. It ultimately closed up at 27,005 yuan/mt, up 260 yuan/mt, or 0.97%. Trading volume fell to 87,928 lots, while open interest increased by 1,009 lots to 158,000 lots. Last Friday, SHFE zinc posted a small bullish candlestick. Although macro sentiment was volatile, China continued destocking, TCs kept falling, and smelters began cutting production. China's continued destocking driven by exports, along with tight supply, pushed the SHFE zinc price center higher. Today, SHFE zinc is expected to consolidate at highs.

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