SMM Zinc Market Morning Comment (Jul 9)

Overnight, LME zinc opened at $3,001/mt, initially reaching a high of $3,005/mt, then dropping to a low of $2,942.5/mt, and closed at $2,945/mt, down $55/mt or 1.83%. Trading volume was reduced to 7,725 lots, and open interest increased by 1,215 lots to 234,000 lots. Overnight, LME zinc recorded a bearish candlestick, with the 10-day moving average providing support below. LME zinc inventory remained flat at 258,675 mt. Recently, LME zinc surged due to expectations that the US Fed might cut interest rates in September. With the continued high zinc ingot inventory putting pressure on zinc prices, LME zinc turned to a downward trend.

Overnight, the most-traded SHFE 2408 zinc contract opened at 24,420 yuan/mt, reaching a high of 24,530 yuan/mt, then dropping to a low of 24,345 yuan/mt, and closed at 24,390 yuan/mt, up 20 yuan/mt or 0.08%. Trading volume was reduced to 59,915 lots, and open interest increased by 447 lots to 83,807 lots. Overnight, SHFE zinc recorded a bearish candlestick, with the 5-day moving average forming resistance above. SMM zinc ingot social inventory in China increased by 2,000 mt to 199,900 mt. Amid the off-season for consumption, domestic spot demand was weak, dragging SHFE zinc downward.