SHFE zinc weakened amid insufficient demand in the off-season of consumption [SMM zinc morning comment]

Last Friday, LME zinc prices opened at $2506.5/ton, then fell again to a low of $2489.5/ton. Then it stopped falling and rose to a high of US$2,530/ton. At the end of the day, LME zinc prices fell again, and finally closed up at US$2,509/ton, up US$3/ton, or 0.12%. LME zinc inventory decreased by 2800 mt or 1.31% to 210875 mt. The U.S. PPI recorded an annual rate of 1% in December, which was lower than expected for three consecutive months. As inflation fell, the market increased its bets on the possibility of an early interest rate cut by the Federal Reserve. The bearish sentiment eased and LME zinc prices recovered.

The most-traded SHFE 2403 zinc contract opened at 21035 yuan/mt overnight and fell to 21010 yuan/mt before rallying to a peak of 21185 yuan/mt. It eventually settled at 21180 yuan/mt, up 65 yuan/mt or 0.31%. Trading volume increased 3275 to 26872 lots, and open interest gained by 4416 lots to 70073 lots. During the off-peak consumption season, some zinc downstream companies are considering taking an early holiday in January. Insufficient demand has suppressed zinc prices, and zinc prices have been running weakly.