Zinc Prices Maintain Fluctuating Trend with Limited Downside Potential [SMM Zinc Morning Comment Nov 19]

Overnight, the US allowed Kyiv to attack Russian depths within 300 kilometers; ECB Governing Council member: a 25 basis point interest rate cut in December is almost certain; Kazuo Ueda: if economic and price trends meet forecasts, the Bank of Japan will continue to raise rates; British media: Trump plans to enter the cryptocurrency trading platform; Norway's largest oil field temporarily shut down; Xi Jinping met with the British Prime Minister and the Australian Prime Minister; the Ministry of Finance has allocated a debt limit of 6 trillion yuan to various regions; the Central Air Traffic Control Committee is about to launch eVTOL trials in six cities.

Overnight, LME zinc opened at $2,953/mt. After a brief consolidation around the daily moving average, the focus shifted to around $2,965/mt. During European trading hours, it peaked at $2,984/mt, then bears shorted at high levels, causing LME zinc to plunge, with the night session focus shifting to around $2,925/mt, hitting a low of $2,920.5/mt. By the end of the session, the focus slightly lifted, closing up at $2,963/mt, an increase of $9.5/mt or 0.32%. Trading volume decreased to 9,468 lots, and open interest decreased by 1,986 lots to 245,000 lots. Overnight, LME zinc recorded a small bullish candlestick, with the 10-day moving average forming resistance above, and the KDJ indicator expanding upwards. Overnight, LME inventory increased by 11,050 mt to 259,500 mt, an increase of 4.45%, continuing the trend of rising inventory. The overnight weakening of the US dollar provided support for base metals, but the significant increase in LME inventory formed resistance above for LME zinc, maintaining a fluctuating trend.

Overnight, the most-traded SHFE zinc 2412 contract opened at 24,595 yuan/mt. Initially, SHFE zinc fluctuated downward along the daily moving average, hitting a low of 24,475 yuan/mt. Subsequently, bears took profits and exited, causing SHFE zinc to rebound from the low, peaking at 24,765 yuan/mt by the end of the session, closing up at 24,740 yuan/mt, an increase of 180 yuan/mt or 0.73%. Trading volume decreased to 71,066 lots, and open interest decreased by 1,855 lots to 96,416 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 5-day moving average providing support below. Overnight, SHFE zinc maintained a fluctuating trend. On the fundamentals side, with a large amount of warehouse receipts, SMM social inventory slightly increased, indicating moderate buying the dip by downstream enterprises, providing support on the fundamentals side.