Fundamentals Still Provide Support, Zinc Prices Rise in Domestic and Overseas Markets [SMM Zinc Morning Comment]

SMM, Aug 12: Last Friday, US Fed Governor Bowman hinted at caution regarding rate cuts; Israeli intelligence assessed that Iran would attack soon; Ukrainian forces advanced into Russian territory, raising concerns about the safety of nuclear power plants; Nasdaq plans to eliminate suspicious companies with stock prices below $1/share; the central bank announced a gradual increase in government bond transactions in open market operations; the central bank issued a significant document supporting the sustainable development of the housing rental industry; China's CPI in July rose 0.5% YoY and 0.5% MoM; the National Development and Reform Commission actively supports the development of key areas in service consumption.

Last Friday, LME zinc opened at $2,645.5/mt, briefly dipped below $2,648/mt at the beginning of the session, then longs increased their positions, and LME zinc fluctuated upwards, reaching a high of $2,776.5/mt during the night session, and finally closed up at $2,740.5/mt, up $97.5/mt, or 3.69%. Trading volume increased to 15,014 lots, and open interest increased by 1,317 lots to 223,000 lots. Last Friday, LME zinc recorded a large bullish candlestick, with LME inventory decreasing by 2,100 mt to 239,925 mt, a drop of 0.87%. Better-than-expected US employment data boosted the market, and macro sentiment was bullish, leading to a rebound in LME zinc. It is expected that LME zinc will fluctuate today.

Last Friday, the most-traded SHFE zinc 2409 contract opened at 22,845 yuan/mt. At the beginning of the session, shorts exited the market, and SHFE zinc's focus shifted upwards, fluctuating near the average daily line, reaching a high of 22,960 yuan/mt during the session, and finally closed up at 22,890 yuan/mt, up 285 yuan/mt, or 1.26%. Trading volume decreased to 100,000 lots, and open interest decreased by 815 lots to 74,441 lots. Last Friday, SHFE zinc recorded a bullish candlestick, with macro sentiment being bullish, and domestic inventory continued to decrease, strengthening positive sentiment. It is expected that SHFE zinc will fluctuate and consolidate today.