The US Dollar Surges, Pressuring LME Zinc Prices [SMM Zinc Morning Comment]

SMM, Aug 29: Overnight, the US Department of Labor reported that a technical glitch delayed the release of last week's employment data; Israel denied reports of a comprehensive humanitarian ceasefire in Gaza; Libya's oil production is expected to decline further; Wang Yi held a new round of strategic communication with Sullivan; and the Deputy General Manager of Haitong Securities was repatriated. Overnight, LME zinc opened at $2,945/mt. At the beginning of the session, bears increased their positions, causing LME zinc to follow the daily moving average and fluctuate downward. During European trading hours, LME zinc accelerated its decline, with the center of gravity shifting to around $2,875/mt, and it briefly touched a low of $2,865/mt. In the night session, LME zinc attempted to break above but was blocked by the daily moving average, ultimately closing down at $2,872.5/mt, a decrease of $64/mt or 2.18%. Trading volume increased to 12,654 lots, and open interest rose by 1,319 lots to 219,000 lots. Overnight, LME zinc declined, with the upper Bollinger Bands forming resistance and the KDJ indicator expanding downward. Overnight, LME inventory decreased by 6,175 mt to 249,625 mt, a drop of 2.41%, recording a reduction in LME inventory. The sharp rise in the US dollar overnight pressured the performance of base metals, and the uncertainty of economic data increased bearish sentiment, causing the center of gravity for LME zinc to shift downward.

Overnight, the most-traded SHFE zinc 2410 contract opened lower at 23,915 yuan/mt. At the beginning of the session, SHFE zinc followed the daily moving average and fluctuated upward. Subsequently, bulls entered the market, causing SHFE zinc to rise rapidly, with the center of gravity shifting to 24,110 yuan/mt and reaching a high of 24,140 yuan/mt. At the end of the session, bears entered and bulls exited, causing the center of gravity for SHFE zinc to shift downward to around 24,050 yuan/mt, ultimately closing down at 24,075 yuan/mt, a decrease of 60 yuan/mt or 0.25%. Trading volume decreased to 95,117 lots, and open interest increased by 2,839 lots to 126,000 lots. Overnight, SHFE zinc recorded a positive candlestick, with the 5-day moving average forming resistance and the MACD positive candlestick narrowing. Dragged down by the overseas futures market, the center of gravity for SHFE zinc shifted downward. The impact of the off-season on the consumption side continued, and although consumption showed signs of improvement, the expectation of reduced production on the supply side still supported zinc prices.