Domestic Spot Supply Shortage Persists, Expected to Support Zinc Prices [SMM Zinc Morning Comment Dec 24]

Overnight, the Kremlin spokesperson stated that there are no plans yet to arrange a meeting between Putin and Trump; France announced the list of members for its new government; Iran may hold talks with the UK, France, and Germany on the nuclear issue in January next year; the General Office of the CPC Central Committee and the State Council issued a statement on developing general aviation and the low-altitude economy; the US launched a Section 301 investigation into policies related to China's chip industry, with a response from the Ministry of Commerce.

Overnight, LME zinc opened at $2,976/mt, immediately dipped to a low of $2,975/mt, then fluctuated upward, briefly dipping below the daily moving average before shorts reduced positions, allowing LME zinc to climb to a high of $3,028/mt. During the night session, LME zinc fluctuated downward, ultimately closing up at $2,998.5/mt, an increase of $26/mt or 0.87%. Trading volume decreased to 67,497 lots, and open interest fell by 2,109 lots to 228,000 lots. Overnight, LME zinc recorded a bullish candlestick, with resistance from the 10-day and 60-day moving averages above and support from the lower Bollinger Band below. LME inventories decreased by 2,150 mt to 251,975 mt, a decline of 0.85%. The continuous reduction in overseas inventories is expected to provide some support for zinc prices. In the short term, LME zinc is likely to maintain a fluctuating trend, with further macroeconomic information worth monitoring.

Overnight, the most-traded SHFE zinc 2502 contract opened at 25,065 yuan/mt. At the beginning of the session, SHFE zinc fluctuated rangebound around the daily moving average, reaching a high of 25,150 yuan/mt. Subsequently, with increased short positions, SHFE zinc fluctuated downward below the daily moving average. By the end of the session, with reduced long positions, SHFE zinc continued to decline, hitting a low of 24,955 yuan/mt and ultimately closing down at 24,960 yuan/mt, a decrease of 65 yuan/mt or 0.26%. Trading volume decreased to 56,040 lots, while open interest increased by 3,577 lots to 132,000 lots. Overnight, SHFE zinc recorded a bearish candlestick with no lower shadow, facing resistance from the middle Bollinger Band above and support from the 40-day moving average below. Currently, domestic spot supply continues to decline, with the shortage persisting, which is expected to support SHFE zinc fluctuating at highs. Zinc prices are anticipated to hover at highs in the short term.