SHFE zinc may remain high on domestic infrastructure construction expectations [SMM zinc morning comment]

Overnight, the month-on-month growth rate of the US PPI in April exceeded expectations, and traders reduced their bets on the Fed's September rate cut; Powell: I don't think the next move may be a rate hike, and I am less confident about the decline in inflation than before; US National Security Advisor Sullivan plans to visit Saudi Arabia and Israel over the weekend, and Israel will not expand its actions before then; OPEC+ restarted a fierce debate on the oil production capacity of member countries and assessed the possibility of multiple countries increasing production next year; Russian media said that Kazakhstan has applied to OPEC+ to increase production in 2025, and the Ministry of Energy of the Republic of Kazakhstan refuted the rumor; Ministry of Foreign Affairs: Russian President Putin will pay a state visit to China from May 16 to 17; Guolian Securities: Plans to purchase 100% of Minsheng Securities; China-US shipping prices rose nearly 40% in a week, and freight rates of tens of thousands of dollars reappeared

LME zinc opened at $3004/mt yesterday evening, and hit a high of $3011.5/mt and a low of $2962/mt, and closed at $2988.5/mt, a decrease of $9/mt or 0.3%. Trading volume decreased to 10588 lots, and open interest grew 1066 lots to 241,000 lots. LME zinc inventory fell by 450 tons to 250,950 tons, a decrease of 0.17%. LME zinc maintained high-level fluctuations amid favourable macro environment. However, the US PPI data rose beyond expectations, coupled with Powell's hawkish remarks, the market reduced its bets on US interest rate cuts.

The most-traded SHFE 2407 zinc contract opened at 23710 yuan/mt overnight, and touched a low of 23545 yuan/mt before finishing at 23725 yuan/mt, down 50 yuan/mt or 0.21%. Trading volume was down to 64390 lots, and open interest gained by 1715 lots to 103,000 lots. Thanks to domestic infrastructure expectations, SHFE zinc may maintain high-level fluctuations in the future.