LME trends influence SHFE, expected to remain in the doldrums [SMM zinc morning comment]

SMM, November 11:

Overnight, LME zinc opened at $3,745/mt. In early trading, LME zinc briefly rallied to a high of $3,770.5/mt, then drifted lower throughout the session, hitting a low of $3,707.5/mt near the close. It ultimately settled down at $3,717/mt, down $27/mt, or 0.72%. Trading volume fell to 11,483 lots, and open interest decreased by 3,882 lots to 261,000 lots. Overnight, LME zinc formed a bearish candlestick, with support from the middle Bollinger Band. US October CPI data exceeded expectations, lifting market expectations for a US Fed rate hike in December. The US dollar index strengthened, continuing to pressure zinc prices, and LME zinc consolidated at lows.

Overnight, the most-traded SHFE zinc 2612 contract opened at 25,140 yuan/mt. In early trading, SHFE zinc quickly rallied to a high of 25,310 yuan/mt, then drifted lower through the night session, hitting a low of 25,095 yuan/mt near the close. It ultimately settled up at 25,100 yuan/mt, up 25 yuan/mt, or 0.1%. Trading volume fell to 80,072 lots, and open interest increased by 3,085 lots to 91,892 lots. Overnight, SHFE zinc formed a bearish candlestick, with support from the lower Bollinger Band. Influenced by LME movements, SHFE zinc also traded at lows in the night session. Although the tight ore supply situation remains unchanged and the supply side still provides some support, downstream purchasing enthusiasm is weak in the off-season, and SHFE zinc is expected to remain weak.

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