Fundamental Support Is Insufficient, Zinc Prices Rise [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,876/mt. At the beginning of the session, LME zinc briefly consolidated around the daily moving average before bulls increased positions, driving LME zinc upward. During European trading hours, the center shifted higher to fluctuate around $2,915/mt, reaching a high of $2,923/mt, and finally closed up at $2,923/mt, an increase of $48.5/mt or 1.69%. Trading volume decreased to 8,265 lots, while open interest increased by 3,560 lots to 227,000 lots. Overnight, LME zinc recorded a bullish candlestick, with support provided by the 40-day moving average. The US dollar index dropped significantly overnight, coupled with easing international disputes, leading to a broad rise in base metals, with LME zinc following the upward trend.

Overnight, the most-traded SHFE zinc 2504 contract opened at 24,170 yuan/mt. At the beginning of the session, bears increased positions, causing SHFE zinc to move downward below the upper edge of the daily moving average. The center shifted lower to 24,060 yuan/mt, hitting a low of 24,020 yuan/mt, and finally closed up at 24,075 yuan/mt, an increase of 100 yuan/mt or 0.42%. Trading volume decreased to 38,056 lots, while open interest increased by 1,886 lots to 74,466 lots. Overnight, SHFE zinc recorded a bearish candlestick, with support provided by the 5-day moving average. SMM social inventory increased to 137,100 mt, and rising TC may gradually transmit to the smelting end, strengthening expectations of increased supply, which is expected to limit its upward momentum.