Macro and Fundamentals Jointly Pressure Zinc Prices, Leading to a Significant Pullback [SMM Zinc Brief Review]

SMM, February 5:

The most-traded SHFE zinc 2503 contract opened at 23,570 yuan/mt. SHFE zinc fluctuated in early trading, reaching a high of 23,710 yuan/mt, then began to decline, hitting a low of 23,180 yuan/mt during the midday session, and finally closed down at 23,260 yuan/mt, a drop of 395 yuan/mt or 1.67%. Trading volume increased to 120,000 lots, and open interest rose by 7,257 lots to 97,949 lots. SHFE zinc recorded a bearish candlestick, with the 5-day moving average forming resistance above. Recently, the US implemented tariff hikes on China, and macro uncertainties continued to weigh on zinc prices. Additionally, the limited resumption of operations by downstream zinc enterprises, sluggish consumption, and the inventory buildup expected after the Chinese New Year further weakened fundamental support, leading to a significant intraday decline in zinc prices.

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