SHFE Zinc Opened Higher with a Gap Last Night, but Prices Still Faced Some Resistance Above [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,270/mt. During the early session consolidation, LME zinc dipped to a low of $3,244.5/mt before its center continued to rise. It touched a high of $3,348/mt during the session, then pulled back after hitting the intraday high. Entering the night session, LME zinc hovered at highs before weakening slightly toward the close, ultimately settling higher at $3,304/mt, up $47.5/mt or 1.46%. Trading volume increased to 122,000 lots, while open interest decreased by 1,382 lots to 210,000 lots. On April 7, LME zinc inventory decreased by 25 mt to 113,925 mt, a decline of 0.02%. Overnight, LME zinc posted a bullish candlestick, with the upper Bollinger Bands rail exerting pressure from above and the 10/20-day moving averages providing support below. The market adopted a wait-and-see stance ahead of the deadline set by the US, the US dollar index weakened, and the LME zinc center rose. Attention is on the upcoming US-Iran negotiations.

Overnight, the most-traded SHFE zinc 2605 contract opened higher with a gap at 23,920 yuan/mt. SHFE zinc briefly touched a high of 23,970 yuan/mt in the early session before futures came under pressure and pulled back, dipping to a low of 23,725 yuan/mt during the session. It rebounded slightly toward the close and maintained a fluctuating trend, ultimately settling higher at 23,820 yuan/mt, up 90 yuan/mt or 0.38%. Trading volume increased to 53,312 lots, and open interest increased by 337 lots to 78,650 lots. As of April 7, China's inventory saw a slight inventory buildup. Overnight, SHFE zinc posted a bearish candlestick, with prices holding above the 5/20-day moving averages. Driven by LME, SHFE zinc opened higher with a gap, but the relatively high level of social inventory in China, combined with the ordinary performance of the spot market, exerted some pressure on the rise of zinc prices.

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