Domestic Social Inventory Increases, Weakening Support for Zinc Prices [SMM Zinc Futures Brief]

SMM reported on January 2: The most-traded SHFE zinc 2502 contract opened at 25,240 yuan/mt and then fluctuated widely around the daily moving average. During the session, SHFE zinc hit a high of 25,305 yuan/mt and a low of 25,100 yuan/mt, finally closing down at 25,265 yuan/mt, a decrease of 195 yuan/mt or 0.77%. Trading volume fell to 116,000 lots, and open interest decreased by 5,759 lots to 131,000 lots. SHFE zinc recorded a three-day winning streak, with resistance from the 5-day moving average above and support from the 40-day moving average below. According to an SMM survey, as of this Thursday (January 2), the total zinc ingot inventory across SMM's seven surveyed regions stood at 64,500 mt, down by 700 mt compared to December 26 but up by 2,000 mt compared to December 30. Domestic inventory increased, and the tight spot supply situation eased, weakening support for zinc prices and exerting some pressure on the upward trend. Zinc prices are expected to maintain a fluctuating trend in the short term.

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