SMM Zinc Market Morning Comment (July 25)

Overnight, LME zinc opened at $2,696/mt. Initially, longs reduced positions, causing LME zinc to fluctuate downward around $2,675/mt. During European trading hours, shorts reduced positions, leading LME zinc to quickly rise and peak at $2,718/mt. However, due to insufficient upward momentum, it dipped to $2,670.5/mt during the night session and eventually closed lower at $2,674.5/mt, down $28/mt or 1.04%. Trading volume reduced to 11,751 lots, and open interest decreased by 681 lots to 219,000 lots. Overnight, LME zinc recorded a bearish candlestick, with LME zinc inventory decreasing by 1,875 mt to 245,550 mt, a drop of 0.76%. This week, macro sentiment has been weak, and LME zinc has been continuously declining. The market is awaiting the US GDP and PCE data tonight to validate expectations of a US Fed rate cut. It is expected that LME zinc will swing on a soft note today.

Overnight, the most-traded SHFE zinc 2409 contract opened at 23,050 yuan/mt. Initially, SHFE zinc briefly touched 23,075 yuan/mt, but then shorts increased positions, causing SHFE zinc to fluctuate downward, hitting a low of 22,825 yuan/mt. It eventually closed lower at 22,830 yuan/mt, down 210 yuan/mt or 0.91%. Trading volume reduced to 69,027 lots, and open interest increased by 3,694 lots to 98,687 lots. Overnight, SHFE zinc recorded a bearish candlestick. The supply is tight in the near term but loose in the long term, and there has been no substantial shortage of zinc ingots, weakening support for zinc prices. The market is awaiting more macro guidance and tonight's US economic data. It is expected that SHFE zinc will swing on a soft note today.