SMM Morning Comment For Zinc Market On October 24

SHANGHAI, October 24(SMM) –The National People's Congress on Tuesday is set to approve plans by the Ministry of Finance to issue over 1 trillion yuan government bonds to boost infrastructure investment and economic growth. Navigator Group, the world's second-largest asset manager, is bullish on longer-term U.S. Treasuries after a severe sell-off in bonds this year, betting the Fed's rate-hike cycle is over and the economy will slow next year. The preliminary euro zone consumer confidence index fell to -17.9 in October. Germany's economy is likely to contract in the third quarter amid falling industrial production, shrinking construction and weak consumption, the Bundesbank said in its monthly report. Overnight, LME zinc opened at $2435.5/mt, falling below the 5-day moving average, and closed down 0.35% at $2430/mt. Trading volume was 7861 lots, and open interest decreased 4421 lots to 203,000 lots. The Federal Reserve released the signal that the future interest rate cut will be delayed. On the other hand, the Palestinian-Israeli conflict has escalated, hence the panic in the capital market has intensified. Under the comprehensive influence of macro, zinc prices may go down. Overnight, the most-traded SHFE 2312 zinc contract opened at 20770 yuan/mt, and closed up 90 yuan/mt or 0.43% at 20880 yuan/mt. Trading volume was 45,000 lots, and open interest rose 1141 lots to 71,000 lots. Domestic zinc ingot social inventories are currently 102,600 mt. Yet, with inflows of imported zinc ingots and arrivals of zinc ingots from domestic smelters after they have resumed their normal production, inventories will gradually build up and supply in the spot market will be ample, weakening support to zinc price.