Macro Sentiment Recedes, SHFE Zinc Consolidates [SMM Zinc Morning Comment]

Overnight, US initial jobless claims data hit a new high since the week of August 12, 2023; US May PPI monthly rate recorded the largest drop since October 2023; Hezbollah in Lebanon attacked six Israeli military bases; the US and Ukraine signed a bilateral security agreement; France's left-wing parties announced the formation of an alliance; Li Qiang released the "Fair Competition Review System"; China and New Zealand launched negative list negotiations; domestic refined oil prices were lowered for the fourth time this year.

Overnight, LME zinc opened at $2,870/mt. At the beginning, positive and negative factors intertwined, and LME zinc briefly fell to $2,829.5/mt. Subsequently, investors reduced short positions, and LME zinc fluctuated upwards, reaching a high of $2,892.5/mt during the night session. Then, with the exit of bulls, LME zinc fell, finally closing at $2,870/mt, down $10/mt, with a drop of 0.35%. Trading volume reduced to 9,594 lots, and open interest decreased by 10,748 lots to 217,000 lots. Overnight, LME zinc recorded a long white candle, and LME zinc inventory fell by 2,000 mt to 255,900 mt, a decrease of 0.78%. Pressured by the prospect of a delayed US Fed rate cut, macro sentiment receded, leading to weak adjustments. LME zinc is expected to fluctuate.

Overnight, the most-traded SHFE zinc contract (2408) opened at RMB 23,820/mt. At the beginning, the entry of bulls led SHFE zinc to fluctuate upwards. Subsequently, the entry of shorts dragged SHFE zinc downwards, shifting lower to consolidate near RMB 23,650/mt, and finally closed at RMB 23,670/mt, down RMB 15/mt, with a drop of 0.06%. Trading volume reduced to 51,714 lots, and open interest increased by 1,363 lots to 77,320 lots. Overnight, SHFE zinc recorded a long black candle. With macro sentiment receding and zinc consumption entering the traditional off-season, SHFE zinc is expected to fluctuate.