SHFE zinc bulls reduce positions, night session consolidates at lows [SMM zinc morning comment]

SMM, September 14:

Last Friday, LME zinc opened at $3,860/mt. After the open, LME zinc drifted higher, touching a high of $3,918/mt, then pulled back continuously from highs, dipping to a low of $3,847/mt during the session. It subsequently rebounded to near the daily average and eventually closed up at $3,863.5/mt, up $8.5/mt, or 0.22%. Trading volume decreased to 18,743 lots, and open interest rose by 3,517 lots to 264,000 lots. Last Friday, LME zinc formed a bullish candlestick, with the 10-day moving average above acting as resistance. US CPI data exceeded expectations, pushing the probability of a US Fed rate hike in September higher again, and the US dollar index rose MoM. However, zinc ingot exports have not yet been reflected in LME warehouses, and persistently low LME inventory continued to provide some support for LME zinc. LME zinc is expected to consolidate in the short term.

Last Friday, the most-traded SHFE zinc 2610 contract opened at 26,650 yuan/mt. After the open, SHFE zinc consolidated around the daily average, touching a high of 26,785 yuan/mt near the opening, dipping to a low of 26,550 yuan/mt during the session, and eventually closed down at 26,560 yuan/mt, down 245 yuan/mt, or 0.91%. Trading volume decreased to 73,922 lots, and open interest fell by 4,087 lots to 117,000 lots. Last Friday, SHFE zinc formed a bearish candlestick, with the 40-day moving average below providing support. Bulls reduced positions in the night session, but on the fundamentals side, TC remained at low levels and continued inventory drawdowns provided support for zinc ingot. Overall, SHFE zinc opened and moved lower, and is expected to maintain a consolidation pattern in the short term.

Data source statement: All data other than public information 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.