Zinc Prices Hover around High Levels [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,046.5/mt. During the European session, profit-taking by bulls led to a decline to $3,039/mt. During the night session, bulls pushed LME zinc to a high of $3,095.5/mt before it slightly fell back to consolidate around $3,055/mt, closing at $3,058.5/mt, up $6/mt or 0.2%. Trading volume decreased to 6,876 lots, and open interest increased by 402 lots to 236,000 lots. LME zinc stocks decreased by 400 tons to 257,225 tons, a drop of 0.16%. Although macro sentiment showed no significant changes last Friday, a weaker US dollar provided support for base metals, keeping LME zinc at high levels.

Last Friday, the most-traded SHFE zinc contract (2407) opened at ¥24,680/mt. Bulls increased their positions, pushing SHFE zinc up to ¥24,810/mt, with a high of ¥24,870/mt. Subsequently, profit-taking by bulls led to a decline below the daily moving average, falling to ¥24,660/mt, with a low of ¥24,625/mt, before closing at ¥24,635/mt, up ¥25/mt or 0.1%. Trading volume decreased to 93,382 lots, and open interest increased by 2,212 lots to 126,000 lots. Fundamentally, zinc consumption remained weak, but macro inflation logic and domestic policy support continued, suggesting that zinc prices are likely to remain high.