Social Inventory Increases, SHFE Zinc Shifts Downward [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,073/mt. In early trading, LME zinc fluctuated upward, reaching a high of $3,104/mt during European trading hours. Subsequently, with bulls reducing positions, LME zinc fluctuated downward to around $3,033/mt, briefly touching a low of $3,016/mt, and finally closed down at $3,066/mt, a decrease of $28.5/mt or 0.94%. Trading volume decreased to 10,345 lots, and open interest decreased by 2,173 lots to 252,000 lots. Overnight, LME zinc recorded a bearish candlestick, with LME inventory increasing by 100 mt to 247,175 mt, an increase of 0.04%. With LME inventory continuously rising and overseas soft squeezes coming to an end, LME zinc shifted downward. However, tight supply at the mine end persisted. Attention was on the US election situation, and it is expected that LME zinc would fluctuate at high levels today.

Overnight, the most-traded SHFE zinc 2412 contract opened at 24,925 yuan/mt. In early trading, SHFE zinc briefly touched a high of 24,940 yuan/mt, then shifted downward to fluctuate around the daily moving average, briefly touching a low of 24,645 yuan/mt, and finally closed down at 24,790.5 yuan/mt, a decrease of 330 yuan/mt or 1.31%. Trading volume decreased to 110,000 lots, and open interest decreased by 1,197 lots to 109,000 lots. Overnight, SHFE zinc recorded a bearish candlestick. Fundamentally, domestic social inventory continued to increase while consumption gradually weakened, putting pressure on SHFE zinc. However, tight supply at the mine end still provided support for SHFE zinc. It is expected that SHFE zinc will mainly fluctuate at high levels today.