Supply Side Is Expected to Increase; SHFE Zinc Center Slips [SMM Zinc Morning Comment]

SMM, March 10:

Last Friday, LME zinc opened at $2,929/mt. At the beginning of the session, LME zinc reached a high of $2,929/mt, then fluctuated around the daily average line. During the night session, it declined to a low of $2,873.5/mt, followed by a period of low-level fluctuations, and finally closed down at $2,882/mt, a decrease of $44/mt or 1.5%. Trading volume decreased to 11,584 lots, and open interest fell by 3,265 lots to 220,000 lots. Last Friday, LME zinc formed a bearish candlestick, with support provided by the 5-day moving average below. LME zinc inventory decreased by 775 mt to 160,175 mt, a decline of 0.48%. The US unemployment rate for February exceeded the previous value, and the US dollar index remained at a low level, supporting LME zinc to sustain its high levels. However, market concerns over demand persisted due to tariff disruptions, limiting the upward momentum of LME zinc.

Last Friday, the most-traded SHFE zinc 2504 contract opened at 23,880 yuan/mt. At the beginning of the session, SHFE zinc slightly declined to a low of 23,820 yuan/mt, then rebounded from the low and climbed all the way up, reaching a high of 23,975 yuan/mt before falling back near the daily average line. It eventually closed down at 23,915 yuan/mt, a decrease of 45 yuan/mt or 0.19%. Trading volume decreased to 62,154 lots, and open interest fell by 3,328 lots to 86,292 lots. Last Friday, SHFE zinc formed a bullish candlestick, with resistance from the 5-day moving average above. Although domestic zinc ingot inventory continued destocking, reflecting a gradual recovery in downstream zinc consumption, domestic zinc concentrate TCs continued to rise. In March, expectations for production increase in refined zinc weakened the support from the supply side for zinc prices, pressing the center of SHFE zinc downward.