SMM Zinc Market Morning Comment (July 29)

Last Friday, LME zinc opened at $2,684.5/mt. In the early session, LME zinc rose to a high of $2,704/mt, then fell back to near the average daily line. By midday, LME zinc dropped to a low of $2,648/mt, then rebounded to near the average daily line. At the end of the trading session, LME zinc fluctuated around the average daily line and finally closed lower at $2,663/mt, down $29/mt, a decrease of 1.08%. Trading volume reduced to 9,095 lots, and open interest increased by 635 lots to 220,000 lots. Last Friday, LME zinc recorded a bearish candlestick, with the 5-day average daily line forming resistance above. LME zinc inventory decreased by 1,625 mt to 242,350 mt, a drop of 0.67%. The US core PCE price index for June recorded 2.6%, slightly higher than the previous value. US inflation data showed moderate growth, while US consumer spending in June remained flat compared to the previous value. These data supported expectations for a US Fed rate cut in September, temporarily easing the decline in LME zinc prices.

Last Friday, the most-traded SHFE zinc 2409 contract opened at 22,600 yuan/mt. In the early session, SHFE zinc fell to a low of 22,575 yuan/mt. After the opening, it rose to a high of 22,735 yuan/mt, then fell back to near the average daily line. Subsequently, it fluctuated above the average daily line and finally closed higher at 22,720 yuan/mt, up 120 yuan/mt, an increase of 0.53%. Trading volume reduced to 59,801 lots, and open interest increased by 217 lots to 93,660 lots. Last Friday, SHFE zinc recorded a bullish candlestick, with the lower Bollinger Bands providing support. Market concerns about demand persisted, but the continued reduction in zinc concentrate TC in August both domestically and internationally, along with the ongoing tightness at the mine, continued to support zinc prices. Amid the tug-of-war between bulls and bears, SHFE zinc prices fluctuated.