SMM Zinc Market Morning Comment (July 31)

Overnight, LME zinc opened at $2,641/mt. After the opening, LME zinc fluctuated widely around the average daily line, reaching a high of $2,651/mt during the midday session. It then retreated and fell to a low of $2,615/mt. At the end of the trading session, LME zinc rose again and closed at $2,650.5/mt, up $11.5/mt, or 0.44%. The trading volume increased to 9,714 lots, and the open interest rose by 3,355 lots to 221,000 lots. LME zinc inventory decreased by 2,125 mt to 238,425 mt, a drop of 0.88%. Overnight, LME zinc recorded a bullish candlestick, with the 5-day moving average forming resistance above. Although the US June JOLTs job openings were higher than expected and the previous value was revised upwards, indicating that the labour market remained resilient, the market's optimistic sentiment towards a US Fed rate cut in September persisted, and LME zinc continued to fluctuate.

Overnight, the most-traded SHFE zinc 2409 contract opened at 22,450 yuan/mt. At the beginning of the session, SHFE zinc fell to 22,360 yuan/mt, then fluctuated upwards above the average daily line, reaching a high of 22,685 yuan/mt. Subsequently, SHFE zinc retreated to near the average daily line, and at the end of the trading session, it rose again and closed at 22,650 yuan/mt, up 155 yuan/mt, or 0.69%. The trading volume increased to 97,354 lots, and the open interest decreased by 1,423 lots to 92,536 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the lower Bollinger Bands providing support. Recently, the non-ferrous metals market prices has shown a weak trend. However, on July 30, the Central Committee of the Communist Party of China held a meeting, proposing to expand domestic demand with a focus on boosting consumption. Market sentiment was somewhat lifted, and SHFE zinc prices center rose. Attention should be paid to the subsequent performance of domestic consumption.