SMM Zinc Market Morning Comment (Jun 4)

Overnight, LME zinc opened at $2,984/mt, plummeting to around $2,950/mt, then reaching a high of $2,995.5/mt, hitting a low of $2,935/mt before closing at $2,937/mt, down $48/mt, a decrease of 1.61%. Trading volume increased to 11,000 lots, and open interest reduced by 1,353 lots to 247,000 lots. Overnight, LME zinc recorded four consecutive bearish candlesticks. The 20-day moving average above formed resistance, while the 40-day moving average below provided support. The KDJ indicator expanded downwards. LME zinc inventory decreased by 1,100 mt to 255,925 mt, a drop of 0.4%. The US May ISM Manufacturing PMI declined for the second consecutive month, indicating a weakening overseas economy. The base metals collectively retreated amid weak macro sentiment.

Overnight, the most-traded SHFE 2407 zinc contract opened at 24,320 yuan/mt, reaching a high of 24,435 yuan/mt, then hitting a low of 24,095 yuan/mt, and closed at 24,200 yuan/mt, down 260 yuan/mt, a decrease of 1.06%. Trading volume reduced to 109,000 lots, and open interest increased by 620 lots to 98,000 lots. Overnight, SHFE zinc recorded a small bearish candlestick. The middle track of the Bollinger Bands below provided support, and the KDJ indicator expanded downwards. Affected by the weakness in LME zinc, SHFE zinc moved downwards after a higher opening overnight. However, with frequent positive domestic economic news and continuously declining TCs at smelters, the decline in SHFE zinc was limited.