Zinc Prices Maintain a Fluctuating Trend; Focus on Domestic Social Inventory Performance [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,240.0/mt, dipped below $3,221.0/mt in early trading, then its center fluctuated upward at a slower pace. After entering the night session, it accelerated higher and touched above $3,343.0/mt, finally closing up at $3,323.0/mt, up $93/mt, a gain of 2.88%. Trading volume increased to 121,000 lots, while open interest decreased by 516 lots to 219,000 lots. Last Friday, LME zinc posted a bullish candlestick, with the 20-day moving average above capping it. As weak US non-farm payrolls data to some extent boosted market expectations for a US Fed interest rate cut, the US dollar index softened and LME zinc rose.

Last Friday, the most-traded SHFE zinc 2604 contract opened at 24,350 yuan/mt. In early trading, SHFE zinc fluctuated downward and dipped below 24,220 yuan/mt. Subsequently, bears reduced positions, the center of SHFE zinc moved higher, and it touched above 24,370 yuan/mt, finally closing at 24,330 yuan/mt, up 70 yuan/mt, a gain of 0.29%. Trading volume fell to 58,655 lots, while open interest decreased by 932 lots to 84,384 lots. Last Friday, SHFE zinc posted a bearish candlestick, with the 5/40-day moving averages above capping it. Domestic consumption has not fully recovered, and coupled with the continued increase in domestic social inventory recently, zinc prices remain capped on the upside.

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