Spot consumption drags down zinc prices, SHFE zinc moves downwards after a higher opening [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3128.5/mt. At the beginning of the session, LME zinc briefly fell to a low of $3083/mt, then rebounded twice to reach a high of $3185/mt. Subsequently, LME zinc quickly declined and fluctuated at a low level towards the end of the trading session, finally closing lower at $3123/mt, down $12/mt or 0.38%. Trading volume reduced to 12,205 lots, and open interest increased by 1,350 lots to 242,000 lots. LME zinc inventory decreased by 325 tons to 258,525 tons, a drop of 0.13%. Although US Fed officials remain cautious about inflation and rate cuts, market bullish sentiment persists.

Overnight, the SHFE 2407 zinc contract opened at 25,000 yuan/mt. After the opening, SHFE zinc briefly rose to a high of 25,190 yuan/mt. As longs reduced their positions, SHFE zinc quickly declined to a low of 24,620 yuan/mt, finally closing up at 24,775 yuan/mt, up 80 yuan/mt or 0.32%. Trading volume reduced to 165,000 lots, and open interest increased by 1,571 lots to 128,000 lots. Recently, macro sentiment has remained warm, and tight supply of ore supports the continuous rise in zinc prices. However, domestic consumption has not shown significant improvement.