Waiting for More Macro Guidance, SHFE Zinc Mainly Consolidates [SMM Zinc Morning Comment Dec 4]

Overnight, another US Fed official expressed caution regarding action in December; Israeli Defense Minister Katz stated that if the ceasefire agreement breaks down, Lebanon and Hezbollah will no longer be distinguished; sources indicated that OPEC+ might extend the latest round of production cuts until the end of Q1 next year; France will review a no-confidence motion against the government on Wednesday local time (23:00 Beijing time); NDRC announced the improvement of the pricing mechanism for refined oil pipeline transportation; market news reported that the 10-year national bond yield fell below 2%, prompting an urgent survey by the central bank, with notifications already issued; four major industry associations, including semiconductors, jointly called for cautious selection of US chip purchases

Overnight, LME zinc opened at $3,079/mt, quickly dipped to $3,042/mt at the opening, then fluctuated upward with increased long positions, reaching a high of $3,105/mt during the night session, and finally closed up at $3,099/mt, an increase of $17.5/mt or 0.75%. Trading volume increased to 10,267 lots, while open interest decreased by 4,938 lots to 243,000 lots. Overnight, LME zinc recorded a long lower shadow bullish candlestick, with LME inventory increasing by 1,725 mt to 278,000 mt, an increase of 0.62%. The fundamental pattern remained unchanged, with the US Fed maintaining a cautious stance on interest rate cuts. LME zinc mainly fluctuated in adjustment, and it was expected to fluctuate mainly today.

Overnight, the most-traded SHFE zinc 2501 contract opened at 25,370 yuan/mt, quickly declined at the beginning of the session, then the center moved up to fluctuate near the daily average line. Subsequently, with increased short positions, SHFE zinc quickly dipped to 25,165 yuan/mt, then fluctuated upward with increased long positions, reaching a high of 25,405 yuan/mt at the end of the session, and finally closed up at 25,345 yuan/mt, an increase of 55 yuan/mt or 0.12%. Trading volume decreased to 89,282 lots, while open interest increased by 1,135 lots to 134,000 lots. Overnight, SHFE zinc recorded a small bearish candlestick. The fundamentals pattern remained unchanged, with the demand side slightly weakening due to weather impacts. Waiting for more macro guidance, the center of SHFE zinc slightly moved down, and it was expected to fluctuate mainly today.