SHFE zinc rebounds from lows, expected to consolidate in the short term [SMM zinc morning comment]

SMM October 16 news:

Overnight, LME zinc opened at $3,709.5/mt and then declined all the way. It touched a high of $3,716/mt in early trading, and near the end of the session it dipped to $3,650/mt, finally closing down at $3,673.5/mt, down $42/mt, or 1.13%. Trading volume increased to 15,979 lots, and open interest rose by 4,173 lots to 264,000 lots. Overnight, LME zinc formed a bearish candlestick, with support from the lower Bollinger Band. US September PPI data far exceeded expectations, and the elevated US dollar index continued to weigh on base metals. In addition, LME zinc ingot inventory kept accumulating to 151,000 mt, so LME zinc extended its decline.

Overnight, the most-traded SHFE zinc 2612 contract opened at 25,300 yuan/mt, then rebounded all the way. It dipped to 25,170 yuan/mt in early trading, touched a high of 25,445 yuan/mt during the session, and finally closed down at 25,375 yuan/mt, down 50 yuan/mt, or 0.2%. Trading volume decreased to 40,066 lots, and open interest rose by 250 lots to 103,000 lots. Overnight, SHFE zinc formed a bullish candlestick, with support from the lower Bollinger Band. Affected by continued declines in the LME market, SHFE zinc opened lower with a gap in the night session. However, on the fundamentals side, the tight domestic ore supply situation has not improved, and smelters' production enthusiasm is relatively weak due to profit pressure, providing some support to zinc prices. SHFE zinc rebounded slightly from low levels and is expected to maintain a fluctuating trend in the short term.

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