Macro sentiment is weak, zinc prices encounter resistance [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,928.0/mt, initially shot up to $3,939.0/mt before bears added positions to pressure prices, sending LME zinc drifting lower to hit a low of $3,860.5/mt before the European trading session. Entering the European trading session, bulls entered on dips, and LME zinc stabilized and rebounded, consolidating around $3,890/mt, ultimately closing down at $3,897.5/mt, down $14.0/mt, or 0.36%. Trading volume increased to 11,410 lots, and open interest rose by 1,076 lots to 264,000 lots. Overnight, LME zinc posted three consecutive bearish candlesticks, with the daily candlestick center edging lower, while the middle Bollinger Band provided support below. Overnight, US Treasury yields rose across the board, and the US September PMI hit a new high in recent years, reigniting market concerns over US Fed interest rate hikes. The US dollar strengthened sharply, weighing on zinc prices and pushing the center slightly lower.

Overnight, the SHFE zinc 2611 contract opened at 26,620 yuan/mt, initially dipped directly to 26,610 yuan/mt, then bulls added positions to push SHFE zinc sharply higher, reaching a high of 26,795 yuan/mt. It then pulled back under pressure, drifting lower during the session, with the center running below the daily average line, ultimately closing up at 26,710 yuan/mt, up 195 yuan/mt, or 0.74%. Trading volume decreased to 56,255 lots, and open interest increased by 1,069 lots to 146,000 lots. Overnight, SHFE zinc posted a bullish candlestick with a long upper shadow, with the middle Bollinger Band providing support below and the KDJ indicator opening upward. On the fundamentals side, the zinc ore shortage remains unresolved, with TCs staying at low levels, providing strong support at the bottom. However, expectations for US Fed interest rate hikes have risen, and the LME zinc 0-3 backwardation structure has pulled back, leaving zinc prices under pressure above.

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