Macro Sentiment Improves, SHFE Zinc Price Center Moves Higher [[SMM Zinc Morning Comment]]

SMM, May 9:

Overnight, LME zinc opened at $2,618/mt. After opening, LME zinc fluctuated considerably around the daily average line, hitting a low of $2,590/mt during the mid-session. During the night session, LME zinc prices rebounded from the lows, reaching a high of $2,640.5/mt at the end of the session. It eventually closed up at $2,636/mt, up $23/mt or 0.88%. Trading volume increased to 11,613 lots, while open interest rose by 2,040 lots to 213,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the middle Bollinger Band acting as resistance. The US and the UK reached a trade agreement, and the US also indicated its intention to lower import tariffs on China, boosting macro sentiment in the market. During the night session, zinc prices rebounded from the lows.

Overnight, the most-traded SHFE zinc 2506 contract opened at 22,155 yuan/mt. In the early session, SHFE zinc dipped slightly to 22,075 yuan/mt before fluctuating upward, reaching a high of 22,350 yuan/mt at the end of the session. It eventually closed up at 22,340 yuan/mt, up 165 yuan/mt or 0.74%. Trading volume decreased to 69,484 lots, while open interest increased by 275 lots to 120,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 10-day moving average acting as resistance. On Thursday, SMM zinc ingot inventory fell by 800 mt WoW to 83,300 mt. Zinc ingot inventory decreased slightly again, providing support for zinc prices. Coupled with the improvement in macro sentiment, the center of SHFE zinc prices moved slightly higher.