Bears Reduced Positions and Exited, SHFE Zinc Center Shifted Upward [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,509.5/mt. In the early session, LME zinc fluctuated around the daily moving average. Entering the night session, LME zinc surged significantly, with the center shifting up to around $3,555/mt, ultimately closing higher at $3,558/mt, up $50/mt or 1.44%. Trading volume increased to 10,947 lots, and open interest decreased by 2,655 lots to 227,000 lots. Overnight, LME zinc posted a large bullish candlestick with a long lower shadow, with the middle Bollinger Bands track providing support below. The US core PCE price index annual rate in April rose to 3.3%, in line with market expectations. Easing expectations for the Middle East situation and a weaker US dollar drove a broad rally in base metals during the night session, and LME zinc rose accordingly.

Overnight, the most-traded SHFE zinc 2607 contract opened at 24,725 yuan/mt. After a brief consolidation in the early session, SHFE zinc rose steadily, touching a high of 24,915 yuan/mt, and ultimately closed higher at 24,900 yuan/mt, up 220 yuan/mt or 0.89%. Trading volume decreased to 52,694 lots, and open interest decreased by 140 lots to 106,000 lots. Overnight, SHFE zinc posted a bullish candlestick, with the 20-day moving average providing support below. Overnight, positive macro sentiment drove a broad rally in base metals. Smelter maintenance in June is expected to increase for zinc, and production is expected to decline further. Combined with disruptions on the ore side outside China, the supply-side support for zinc remains strong, and buying on dips is recommended.

Data source disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.