Macro Sentiment Improved, Zinc Prices Recorded a Five-Day Winning Streak [SMM Zinc Morning Comment]

Overnight, LME zinc was closed for Memorial Day. Given expectations of easing geopolitical conflicts, LME zinc is expected to fluctuate at highs during the day.

Overnight, the most-traded SHFE zinc 2607 contract opened at 24,955 yuan/mt. At the beginning of the session, SHFE zinc oscillated around the daily moving average, dipping to 24,880 yuan/mt during the period. Subsequently, bulls increased positions, pushing the SHFE zinc center upward to around 24,980 yuan/mt above the daily moving average for consolidation. It eventually closed higher at 24,970 yuan/mt, up 155 yuan/mt or 0.62%. Trading volume decreased to 43,802 lots, while open interest increased by 2,055 lots to 108,000 lots. Overnight, SHFE zinc recorded a five-day winning streak, with the daily candlestick center shifting upward and various moving averages below providing support. On the fundamentals side, ore-end TCs were approaching 0 yuan/mt Zn, and smelter comprehensive profits declined notably. Smelter maintenance is set to increase in late June. Under expectations of supply-side reductions, zinc prices are expected to fluctuate at highs. However, social inventory increased again to 265,000 mt amid weak consumption. Attention should be paid to the resistance level at 25,000 yuan/mt.

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