Downstream consumption is expected to improve, zinc prices weakly recover [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,738.0/mt. In early trading, LME zinc drifted lower, dipping to $3,711.0/mt before the European session. Entering the night session, bears took profits and exited, and LME zinc drifted higher to touch $3,765.0/mt, eventually closing up at $3,757.0/mt, up $16.0/mt, or 0.43%. Trading volume increased by 1,067 lots to 11,430 lots, while open interest decreased by 4,849 lots to 254,000 lots. Overnight, LME zinc posted a four-day winning streak, with the daily candlestick center continuing to move higher and the MACD bearish candlestick narrowing. On the macro front, geopolitical conflicts remained volatile, but oil prices were stable, macro sentiment recovered, and there were clear signs of bears reducing positions and exiting. LME inventory continued to increase, and the previous main pricing logic for zinc prices showed signs of loosening, with zinc prices undergoing a weak recovery.

Overnight, the SHFE zinc 2612 contract opened at 25,630 yuan/mt. In early trading, SHFE zinc quickly dipped to an intraday low of 25,615 yuan/mt. Subsequently, bulls added positions, driving prices strongly higher to touch 25,790 yuan/mt. In the latter half, bullish momentum weakened, and SHFE zinc pulled back under pressure, consolidating before finally closing up at 25,700 yuan/mt, up 150 yuan/mt, or 0.59%. Trading volume decreased by 60,775 lots to 57,023 lots, while open interest increased by 2,426 lots to 118,000 lots. Overnight, SHFE zinc formed a bullish candlestick with upper and lower shadows, with the daily candlestick center continuing to move higher and the 5-day moving average providing support below. China's zinc ingot exports in September reached 70,400 mt, slightly exceeding expectations, and a certain level of exports is still expected in October. Coupled with a modest improvement in downstream consumption, the zinc price center edged up slightly.

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