Macro Policies and Supply-Demand Imbalance Expected to Keep Zinc Prices Hovering at Highs [SMM Zinc Morning Comment Nov 26]

Overnight, the US 2/10-year Treasury yield curve inverted for the first time in two months; Israel and Lebanon reached an agreement on the terms to end the Israel-Hezbollah conflict; Analysts reported that Ukraine launched a large-scale missile attack on Russia's Kursk region using foreign-made missiles; OPEC+ may discuss maintaining current oil production cuts at its December 1 meeting; Li Qiang held talks in Beijing with representatives of enterprises participating in the second Chain Expo; The central bank and nine other departments proposed to tilt policies more towards private and small-to-medium-sized enterprises; The central bank conducted a 900 billion yuan Medium-term Lending Facility (MLF) operation; Twelve departments issued the "Sailing" Action Upgrade Plan for the Large-scale Application of 5G.

Overnight, LME zinc opened at $2,982/mt. In the early session, LME zinc fluctuated around the daily average. During the European trading hours, LME zinc fluctuated upward above the daily average, reaching a high of $2,032/mt. By the end of the session, LME zinc fluctuated rangebound around $3,015/mt, closing up at $3,020/mt, an increase of $48/mt or 1.62%. Trading volume increased to 78,108 lots, and open interest increased by 372 lots to 245,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the 10-day moving average providing support below. LME inventory decreased by 3,125 mt to 258,200 mt, a reduction of 1.20%. With the US 2/10-year Treasury yield curve inverting for the first time in two months, LME zinc is expected to maintain a fluctuating trend.

Overnight, the most-traded SHFE zinc 2412 contract opened at 25,225 yuan/mt. In the early session, shorts reduced positions, and SHFE zinc fluctuated upward above the daily average, reaching a high of 25,445 yuan/mt by the end of the session, closing up at 25,430 yuan/mt. Trading volume decreased to 32,386 lots, and open interest decreased by 2,718 lots to 79,514 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the upper Bollinger Band forming resistance above and the 10-60 day moving averages providing support below. On the macro front, the central bank and nine other departments proposed to tilt policies more towards private and small-to-medium-sized enterprises, while the central bank conducted a Medium-term Lending Facility operation. On the fundamental side, supply shortages persist, and SHFE zinc is expected to hover at highs.