LME Stocks Fell to Nearly 4-Month Low, LME Zinc Prices Slightly Rose [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,851.5/mt. Initially, it narrowly fluctuated around the daily average line, hitting a low of $2,838.5/mt. During the European session, bulls increased their positions, pushing LME zinc up to a high of $2,883.5/mt. Subsequently, bears targeted the high, bringing LME zinc back down near the daily average line, finally closing up at $2,862/mt, up by $15.5/mt or 0.54%, with a trading volume of 6,979 lots and open interest down by 822 lots to 230,000 lots. Overnight, LME zinc stocks decreased by 200 mt to 240,200 mt, down by 0.08%, continuing the trend of destocking. Despite the hawkish remarks from the US Fed weakening the macro sentiment, the continued destocking of LME stocks provided support for prices, leading to mainly fluctuating LME zinc prices.

Overnight, the most-traded SHFE zinc 2408 contract opened at 23,745 yuan/mt, hitting a low of 23,655 yuan/mt and a high of 23,790 yuan/mt, finally closing up at 23,760 yuan/mt, up by 60 yuan/mt or 0.25%, with a trading volume of 65,938 lots and open interest up by 244 lots to 88,009 lots. Overnight, SHFE zinc turned from bearish to bullish, with the 10-day moving average providing support below. In July, SMM domestic zinc concentrate TC was further reduced by 500 yuan to 2,200 yuan/mt in metal content, with tight supply of ore still unresolved. However, as consumption is in the off-season, zinc prices are mainly expected to adjust weakly.