SMM Zinc Morning Comment:The weakening of the U.S. dollar and production cuts by overseas smelters caused LME zinc to rise

Overnight, LME zinc opened at $2520/mt, hitting a low and high of $2512.5/mt and $2569/mt respectively, and closed at $2566/mt, up $43.5/mt or 1.72%. Trading volume decreased to 10628 lots, and open interest grew 1994 lots to 228,000 lots. LME zinc inventories decreased by 325 mt to 271,950 mt, a decrease of 0.12%. The U.S. dollar is weakening, non-ferrous metals are strong, and the news of overseas smelting plant reductions and shutdowns is gradually transmitted to spot supply. The market expects tighter supply, providing support for LME Zinc.
The most active SHFE 2404 zinc contract prices opened at 21305 yuan/mt and gained 135 yuan/mt or 0.64% to settle at 21340 yuan/mt, with the high-end of 21390 yuan/mt and the low-end of 21285 yuan/mt. Trading volumes decreased to 33634 lots and open interest fell 227 lots to 82081 lots. Expectations over output cuts at smelters bolstered SHFE zinc. The continuous inflow of imported zinc ingots may replenish part of the supply, coupled with the slow recovery of consumption, the upside space for SHFE zinc is limited.