SHFE Zinc Records a Bullish Candlestick; Demand Recovery Still Requires Time [SMM Zinc Morning Comment]

Overnight, Trump announced an investigation into the copper industry; British media reported that Ukraine agreed to a mineral agreement with the US after the US gave up on pursuing $500 billion in potential revenue; Trump stated that sanctions on Russia would be lifted at some point; US consumer confidence in February recorded the largest monthly decline in over three years; Trump introduced a $5 million immigration gold card, and the EB-5 visa program will be canceled; Chinese Premier Qiang Li emphasized accelerating technological innovation in cutting-edge emerging fields to better cultivate new productive forces and promote high-quality development; Shenzhen set its 2025 economic growth target at 5.5%; DeepSeek is accelerating the launch of its R2 AI model; Baidu acquired YY Live for $2.1 billion; Tesla announced an update to its Autopilot advanced driver-assistance system for urban roads.

Overnight, LME zinc opened at $2,846/mt. In early trading, LME zinc fluctuated around the daily moving average, reaching a high of $2,847.5/mt. Subsequently, with bears increasing positions, LME zinc fluctuated downward below the daily moving average. After a slight rebound, it pulled back again, hitting a low of $2,805/mt by the end of trading and closing down at $2,805.5/mt, a decrease of $39.5/mt or 1.39%. Trading volume decreased to 94,430 lots, while open interest increased by 2,377 lots to 233,000 lots. Overnight, LME zinc recorded a bearish candlestick, with support provided by the lower Bollinger Band. LME zinc inventory increased by 3,775 mt to 164,775 mt (2.34%). Overseas social inventory continued to rise, putting pressure on LME zinc. Currently, Trump has announced an investigation into the copper industry, with officials indicating that Trump favors imposing copper tariffs over quotas. The tariff disruptions persist, while a massive power outage in Chile, affecting over 98% of the population, has led the government to declare a "state of disaster," potentially impacting mining operations. LME zinc is expected to maintain a fluctuating trend in the short term.

Overnight, the most-traded SHFE zinc 2504 contract opened at 23,500 yuan/mt. Subsequently, with bulls increasing positions, SHFE zinc climbed to a high of 23,670 yuan/mt. However, bears increased positions, causing SHFE zinc to decline continuously, ultimately closing down at 23,525 yuan/mt, a decrease of 70 yuan/mt or 0.30%. Trading volume decreased to 56,889 lots, while open interest increased by 2,308 lots to 92,888 lots. Overnight, SHFE zinc recorded a bullish candlestick, with resistance from various moving averages above and support from the lower Bollinger Band below. Domestic demand conditions remain unclear, with end-use consumption yet to recover fully. Meanwhile, the upward trend in domestic processing fees is expected to persist. SHFE zinc is expected to maintain fluctuating movements.