Bulls Add Positions, Driving SHFE Zinc Center Higher [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,880/mt. In early trading, LME zinc quickly dipped to $3,873/mt before consolidating around the daily average line. During European trading hours, bulls added positions, pushing LME zinc to rise sharply. Entering the night session, LME zinc consolidated at highs, and in late trading it surged to touch $3,947/mt, finally closing at $3,940.5/mt, up $59/mt, or 1.52%. Trading volume decreased to 12,532 lots, and open interest fell by 832 lots to 261,000 lots. Last Friday, LME zinc recorded a large bullish candlestick, with the daily candlestick center moving significantly higher, the KDJ gap expanding upward, and the lower Bollinger Bands midline providing support. Last Friday, bears reduced positions and exited, the US dollar weakened and nonferrous metals broadly rose. Although LME zinc inventory increased, overall inventory levels remained low. Combined with lingering supply concerns from the South Korean smelter accident, zinc prices fluctuated at highs.

Last Friday, SHFE zinc 2611 contract opened at 26,675 yuan/mt. In early trading, SHFE zinc briefly touched a high of 26,760 yuan/mt before coming under pressure and pulling back. Prices then continued to decline, dipping to 26,590 yuan/mt before bulls added positions, pushing SHFE zinc to drift higher. In late trading, it consolidated at highs, finally closing at 26,745 yuan/mt, up 180 yuan/mt, or 0.68%. Trading volume decreased to 51,652 lots, and open interest increased by 4,133 lots to 134,000 lots. Last Friday, SHFE zinc recorded a small bullish candlestick, with the daily candlestick center moving slightly higher, and the lower Bollinger Bands midline providing support. Last Friday, supported by bulls adding positions, zinc prices drifted higher. China's zinc ingot exports, combined with increased stockpiling ahead of the upcoming dual holidays, pushed social inventory down to 213,000 mt. With TCs at low levels, zinc prices found strong support at the bottom.

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