LME funds took profits, zinc prices followed downward [SMM Zinc Morning Comment]

Overnight, the US Q1 economic growth rate hit a one-year low; it was revealed that Biden secretly allowed Ukraine to use US weapons to attack targets within Russia; OPEC+ is formulating a complex production cut agreement involving this year and next; US gasoline and distillate inventories unexpectedly increased by over 2 million barrels last week; Trump became the first former US president to be convicted; deposits continue to "divert" to financial markets, potentially affecting May M2 and other data; PBOC's Tao Ling: Strongly support the first loan for small and medium-sized tech enterprises and large-scale equipment updates in key areas.

Overnight, LME zinc opened at $3,110/mt. Approaching the end of the overnight session, the focus shifted down to $3,045/mt, with a low of $3,035/mt. LME zinc then slightly recovered upward, finally closing lower at $3,061/mt, down $51/mt, a decrease of 1.64%. Trading volume increased to 10,482 lots, and open interest increased by 3,834 lots to 245,000 lots. Overnight, LME zinc inventory decreased by 1,950 mt to 251,775 mt, a decrease of 0.77%.

Overnight, the most-traded SHFE 2407 zinc contract opened at 24,580 yuan/mt. At the end of the trading session, it reached a high of 24,870 yuan/mt, finally closing lower at 24,845 yuan/mt, down 250 yuan/mt, a decrease of 1%. Trading volume decreased to 90,336 lots, and open interest decreased by 603 lots to 108,000 lots. Macroeconomically, the increased expectation of a US Fed rate cut supported the overnight prices to recover upward. Fundamentally, SMM social inventory decreased by 1,000 mt to 209,400 mt, limiting the decline in zinc prices. SHFE zinc is expected to continue to run at high levels.