Supply Reduction Continues to Support Zinc Prices, SHFE Zinc Rises in Night Trading [SMM Morning Comment]

SMM, Aug 19: US Fed FOMC Member for This Year: It's Time to Consider Rate Cuts; Gaza Ceasefire Talks to Resume This Week, Iran May Temporarily Halt Retaliation Against Israel; Safety Concerns Arise at Two Major Nuclear Power Plants in Russia and Ukraine; CSRC: Strengthen Record Management and Supervision of Securities Evaluation Agencies; Three Ministries Propose New Regulations: Sponsorship and Audit Services Can Be Charged in Stages.

Last Friday, LME zinc opened at $2,782/mt, hovering around the daily moving average in the morning session, peaking at $2,789.5/mt at the beginning of the session. During the midday session, it fluctuated downward to a low of $2,741/mt, then rebounded to near the daily moving average, closing down at $2,770/mt, a decrease of $14/mt or 0.5%. Trading volume decreased to 7,190 lots, and open interest increased by 1,622 lots to 219,000 lots. Last Friday, LME zinc recorded a bearish candlestick, with the 40-day moving average forming resistance above. LME inventory remained flat WoW at 260,600 mt. Last week, concerns about a US economic recession eased, boosting market sentiment, but new home construction data in the US fell short of expectations, and the real estate market showed no improvement, causing zinc prices to hover at highs.
Last Friday, the most-traded SHFE zinc 2410 contract opened at 23,095 yuan/mt. After the opening, SHFE zinc briefly fell around the daily moving average to a low of 23,045 yuan/mt. Subsequently, bulls increased their positions, causing SHFE zinc to fluctuate upward, peaking at 23,300 yuan/mt at the end of the session, and finally closing up at 23,280 yuan/mt, an increase of 35 yuan/mt or 0.15%. Trading volume decreased to 49,502 lots, and open interest increased by 2,451 lots to 91,642 lots. Last Friday, SHFE zinc recorded a bullish candlestick, with the 5-day moving average providing support below. Domestic consumption remained weak, but domestic and international TCs stayed low, and the tight supply situation at the mine end had not eased. In August, with smelter production cuts continuing, supply reduction continued to support SHFE zinc at high levels.