SHFE Zinc Records a Bullish Candle, Center Slightly Moves Downward [SMM Zinc Morning Comment]

Overnight, Trump stated that if no agreement is reached between Russia and Ukraine, tariffs and sanctions will be imposed on Russia. Zelensky set conditions for a ceasefire: a minimum of 200,000 peacekeepers, with the US required to participate. The CEO of Norway's sovereign wealth fund suggested a contrarian strategy: selling US tech stocks and buying Chinese stocks. Musk "poured cold water" on the Stargate project, saying it "actually has no funding." The Central Committee of the Communist Party of China and the State Council announced the implementation of a new round of urbanization actions for agricultural migrants. Six departments, including the Central Financial Office, issued the "Implementation Plan for Promoting Medium and Long-Term Funds to Enter the Market." Trump stated plans to impose tariffs on Chinese goods, to which the Ministry of Foreign Affairs responded: willing to maintain communication and properly manage differences.

Overnight, LME zinc opened at $2,916/mt, then fluctuated rangebound near the daily moving average, reaching a high of $2,921.5/mt. Subsequently, LME zinc fluctuated downward, hitting a low of $2,882.5/mt, before recovering part of the losses and fluctuating rangebound near $2,900/mt. It then faced resistance and pulled back, ultimately closing down at $2,893/mt, a decrease of $18/mt or 0.62%. Trading volume fell to 65,398 lots, and open interest decreased by 1,999 lots to 220,000 lots. Overnight, LME zinc recorded a bearish candlestick, with the middle Bollinger Band forming resistance above. LME zinc inventory decreased by 2,175 mt to 192,950 mt, a drop of 1.11%. Affected by Trump's tariff policies, the US dollar index hovered at a high level and eventually closed higher. LME zinc's center shifted downward, and under the uncertainty of tariffs, LME zinc is expected to remain under pressure and maintain a fluctuating trend in the short term.

Overnight, the most-traded SHFE zinc 2503 contract opened at 24,075 yuan/mt. At the beginning of the session, increased long positions drove SHFE zinc to rise rapidly, followed by volatile movements near the daily moving average, reaching a high of 24,175 yuan/mt. Subsequently, increased long positions attempted to push SHFE zinc above the daily moving average but faced resistance and pulled back to a low of 24,040 yuan/mt. It ultimately closed down at 24,090 yuan/mt, a decrease of 25 yuan/mt or 0.1%. Trading volume fell to 45,467 lots, and open interest decreased by 369 lots to 97,623 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 20-day and 60-day moving averages forming resistance above. Domestic end-use consumption weakened significantly, market activity was sluggish, and spot premiums declined. Zinc prices are expected to fluctuate downward in the short term.