SMM Zinc Market Morning Comment (July 23)

Overnight, LME zinc opened at $2,784/mt. At the beginning of the session, LME zinc fluctuated near the average daily line, reaching a high of $2,800/mt. During the European trading hours, bulls reduced their positions, causing LME zinc to decline, hitting a low of $2,712/mt during the night session. It then rebounded to around $2,730/mt and consolidated, eventually closing lower at $2,734.5/mt, down $39.5/mt or 1.42%. Trading volume increased to 15,468 lots, and open interest decreased by 846 lots to 222,000 lots. Overnight, LME zinc recorded a bearish candlestick, with LME zinc inventory increasing by 5,500 mt to 245,775 mt, an increase of 2.29%. Fundamentals show that the increase in LME inventory, together with ongoing market concerns about overall non-ferrous metal consumption, led to a general decline in non-ferrous metals. LME zinc is expected to trade weakly today.

Overnight, the most-traded SHFE zinc 2409 contract opened at 23,130 yuan/mt, hitting the intraday low at the opening. Subsequently, shorts reduced their positions, causing SHFE zinc to rise, reaching a high of 23,350 yuan/mt at the end of the trading session. It eventually closed lower at 23,325 yuan/mt, down 105 yuan/mt or 0.45%. Trading volume decreased to 88,782 lots, and open interest increased by 843 lots to 96,341 lots. Overnight, SHFE zinc recorded a bullish candlestick. The central bank cut interest rates, with both the one-year and five-year LPR reduced by 10 basis points, and domestic inventory continued to decrease. SHFE zinc opened low and moved higher, and it is expected to fluctuate today.