LME drives SHFE zinc to continue rising [SMM zinc morning comment]

Overnight LME zinc opened at $4,012/mt, initially consolidating along the daily average line. During European trading hours, it dipped to $3,990/mt, then bulls added positions, lifting LME zinc to a high of $4,065/mt near the close. It finally settled up at $4,064/mt, up $43/mt or 1.07%. Trading volume fell to 13,305 lots, while open interest rose by 1,267 lots to 264,000 lots. Overnight, the most-traded SHFE zinc 2610 contract opened at 27,690 yuan/mt, edged down initially to a low of 27,615 yuan/mt, then bulls added positions, and SHFE zinc drifted higher, touching a high of 27,835 yuan/mt near the close. It finally settled up at 27,820 yuan/mt, up 82 yuan/mt or 0.31%. Trading volume fell to 80,202 lots, while open interest rose by 303 lots to 158,000 lots.

Overnight LME zinc posted a large bullish candlestick. Rising energy prices boosted inflation expectations, the US dollar index continued to decline, and base metals broadly rose. Coupled with still-high capital concentration in LME, LME zinc's price center continued to shift upward. LME zinc is expected to fluctuate at highs today. Overnight SHFE zinc posted a small bullish candlestick. The US dollar was under pressure, base metals broadly rose, and with tight supply, SHFE zinc continued to move higher, boosted by LME. SHFE zinc is expected to consolidate at highs today.

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