Zinc Prices Drop Back Slightly as Downstream Consumption Support Reaches Its Limit [SMM Zinc Market Brief]

SMM, January 21: The most-traded SHFE zinc 2503 contract opened at 24,290 yuan/mt. At the beginning of the session, bears increased their positions, causing SHFE zinc to fluctuate below the daily moving average. Subsequently, bulls increased their positions, pushing SHFE zinc above the daily moving average to a high of 24,420 yuan/mt. However, as bulls took profits and exited, SHFE zinc fluctuated downward, hitting a low of 24,120 yuan/mt, and eventually closed down at 24,200 yuan/mt, a decrease of 15 yuan/mt or 0.06%. Trading volume dropped to 147,000 lots, and open interest decreased by 3,746 lots to 98,985 lots. SHFE zinc recorded a long upper shadow bearish candlestick, with resistance from the 20- and 60-day moving averages above and support from the 5- and 10-day moving averages below. Recently, spot premiums/discounts across regions have shown signs of weakness, downstream consumption in various sectors has gradually turned sluggish, and the supply-demand imbalance has largely eased. Zinc prices are expected to gradually pull back, and more macro front updates should be monitored going forward.

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