Zinc Prices Suppress Downstream Consumption, SHFE Zinc Shifts Lower [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,123/mt, reaching a high of $3,147/mt. During European trading hours, LME zinc began to decline to around $3,090/mt. In the night session, LME zinc further dropped to a low of $3,052.5/mt. By the end of the trading session, LME zinc was narrowly fluctuating and closed lower at $3,057/mt, down $66/mt or 2.11%. Trading volume reduced to 9,816 lots, and open interest decreased by 716 lots to 242,000 lots. LME zinc inventory decreased by 900 mt to 257,625 mt, a drop of 0.35%. The US Fed's meeting minutes reiterated hawkish comments, dampening rate cut expectations and reducing market bets on multiple rate cuts by the Fed. The US dollar index rebounded, exerting macro pressure on base metals, leading to a decline in LME zinc.

Overnight, the most-traded SHFE zinc contract opened at 24,595 yuan/mt. After the opening, SHFE zinc slowly declined to a low of 24,440 yuan/mt, then began to narrowly fluctuate around the average daily line, reaching a high of 24,665 yuan/mt. It closed lower at 24,535 yuan/mt, down 355 yuan/mt or 1.43%. Trading volume increased to 130,000 lots, and open interest decreased by 4,761 lots to 122,000 lots. Macro sentiment remained unchanged, but high zinc prices suppressed downstream consumption, and fundamentals showed no improvement, leading to a shift lower in SHFE zinc.