The influence of macro sentiment weighed on SHFE zinc [SMM Zinc Morning Comment]

Overnight, the U.S. trade deficit narrowed in November as domestic demand slowed, causing imports of consumer goods to reach their lowest level in a year. The U.S. Department of Commerce’s Bureau of Statistics said the trade deficit shrank 2.0% in November to $63.2 billion. It is understood that economists had previously predicted that the deficit would increase to US$65 billion. If this trend continues in December, trade may have no effect on economic changes in the fourth quarter.
Overnight, LME zinc prices opened at US$2,510.5/ton and reached a high of US$2,535/ton. LME zinc fell to as low as US$2,500/ton and finally closed up at US$2,510/ton, up US$6/ton, an increase of 0.24%. Trading volume decreased by 1551 lots to 7951 lots, and the open interest increased by 2323 lots to 206,000 lots. LME zinc inventory fell by 1675 tons to 220050 tons, a decrease of 0.76 %. The overall macro sentiment was bearish and the US dollar rebounded, thus LME zinc prices performed weakly.
Overnight, SHFE 2402 zinc contract opened as low as 21,175 yuan/ton. At the beginning of the session, it rose sharply and hit a high of 21,235 yuan/ton. Prices quickly moved down to a low of 21,095 yuan/ton. The contract finally closed down at 21,135 yuan/ton, down 25 yuan/ton, or 0.12%. The trading volume decreased by 52,065 to 35,056 lots, and the positions decreased 540 lots to 68028 lots. Recently affected by macro sentiment, commodities are overall bearish. However, from the perspective of spot fundamentals, there is demand for stocking up at the end of the year and buying on dips. The spot market is tight, and the premium remain high. The fundamental support is strong. It is expected that SHFE zinc may fluctuate widely.