SHFE/LME price ratio declined significantly, and LME zinc's focus shifted upward [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,142/mt. At the beginning of the session, LME zinc briefly fell along the daily moving average, then quickly surged to a high of $3,168/mt due to long positions entering and short positions closing. During European trading hours, LME zinc plunged to a low of $3,103/mt as longs exited, then recorded a V-shaped reversal, fluctuating near the daily moving average. It slightly rose at the end of the session, closing at $3,146/mt, an increase of $3.5/mt or 0.11%. Trading volume increased to 14,714 lots, and open interest increased by 1,737 lots to 256,000 lots. Overnight, LME zinc recorded a small bullish candlestick, with various moving averages providing support below and the MACD bearish column narrowing. Overnight, LME inventory decreased by 2,475 mt to 232,150 mt, a decline of 1.05%, continuing the reduction trend. Recently, LME cash-to-3M contango/backwardation rose above 50, increasing capital concentration, and LME zinc's focus shifted upward.

Overnight, the most-traded SHFE zinc 2412 contract opened at 24,900 yuan/mt. At the beginning of the session, SHFE zinc briefly consolidated around the daily moving average, and then long positions increased, pushing SHFE zinc to fluctuate upward, operating above the daily moving average, with the focus shifting to 25,100 yuan/mt and peaking at 25,150 yuan/mt. Overnight, SHFE zinc recorded a bullish candlestick, with the KDJ indicator expanding upward. The zinc supply remains tight, but recently, galvanizing operating rates in the north have been weak due to environmental protection-driven production restrictions, and consumption transmission is not smooth. Zinc prices still face resistance above, with short-term fluctuations being the main trend.