Bulls Increase Positions and Enter the Market, SHFE Zinc Rebounds from Lows [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,964.5/mt. After a brief consolidation near the daily average line at the beginning of the session, LME zinc was pressured downward in a stepwise manner along the daily average line as bears increased their positions. During European trading hours, the center shifted downward to $2,925/mt. Near the night session, bulls entered at lower levels, driving LME zinc to rebound sharply, with the center moving up to around $2,960/mt. It eventually closed flat at $2,960/mt. Trading volume increased to 12,987 lots, and open interest rose by 440 lots to 226,000 lots. Overnight, LME zinc recorded a long lower shadow bearish candlestick, with support provided by various moving averages below. The escalation of tensions in the Middle East led to LME zinc fluctuating downward, but the decline was limited by a renewed drop in the US dollar.

Overnight, the most-traded SHFE zinc 2505 contract opened at 23,825 yuan/mt. After a brief consolidation near the daily average line at the beginning of the session, the center shifted downward, reaching a low of 23,730 yuan/mt. Bulls then increased their positions, pushing SHFE zinc above the daily average line and reaching a high of 23,905 yuan/mt near the session's end. It ultimately closed down at 23,870 yuan/mt, a decrease of 70 yuan/mt or 0.29%. Trading volume decreased to 68,753 lots, while open interest increased by 1,568 lots to 125,000 lots. Overnight, SHFE zinc recorded a small bullish candlestick, with resistance formed by the 20-day moving average above. Zinc prices fluctuated downward overnight. While supply-side increases may gradually materialize, the bottom of zinc prices remains supported as long as there is no significant inventory buildup.