Bears Enter, SHFE Zinc Center Slightly Moves Downward [SMM Zinc Morning Comment]

Overnight, media reported on Ukraine's peace plan; the Bank of England cut interest rates by 25 basis points to 4.5%; US Treasury Secretary Besent stated that the US will continue to implement a "strong dollar" policy; the US Treasury announced new sanctions on Iran; Deutsche Bank noted that the "valuation discount" of Chinese stocks will disappear.

Overnight, LME zinc opened at $2,792.5/mt. At the beginning of the session, LME zinc briefly moved downward, hitting a low of $2,783.5/mt. Subsequently, bulls increased their positions, driving LME zinc upward to $2,845.5/mt during the night session. However, upward momentum weakened, and it fluctuated near the daily moving average towards the end of the session, ultimately closing higher at $2,825.5/mt, up $35/mt or 1.25%. Trading volume decreased to 10,814 lots, while open interest increased by 1,202 lots to 227,000 lots. Overnight, LME zinc recorded a bullish candlestick, with resistance formed by the 20-day moving average above, and the KDJ indicator showing an upward opening.

Overnight, the most-traded SHFE zinc 2503 contract opened at 23,615 yuan/mt. At the beginning of the session, SHFE zinc fluctuated near the daily moving average. Later, bulls increased their positions, pushing SHFE zinc slightly upward to a high of 23,695 yuan/mt. Subsequently, bears increased their positions, weakening the upward momentum, and the center pulled back to fluctuate near the daily moving average. It ultimately closed lower at 23,635 yuan/mt, down 40 yuan or 0.17%. Trading volume decreased to 56,627 lots, while open interest increased by 949 lots to 98,078 lots. Overnight, SHFE zinc recorded a small bullish candlestick, with resistance formed by the 10-day moving average above.

Zinc Price Outlook: From a macro perspective, in the absence of new tariff-related news, the market holds an optimistic view of tonight's non-farm payrolls data. The US dollar index rebounded, suppressing the performance of base metals. Domestically, although zinc ingot inventory increased after the Chinese New Year, the growth was below expectations. Additionally, the stock market and base metals showed a synchronized upward trend, with base metals broadly rising. Zinc prices are expected to fluctuate in the short term, awaiting guidance from tonight's non-farm payrolls data.