SMM Zinc Market Morning Comment (Aug 2)

Overnight, LME zinc opened at $2,698.5/mt. At the beginning of the session, LME zinc quickly rose to a high of $2,724/mt, then fell back and continued to decline to a low of $2,649.5/mt. Subsequently, LME zinc rebounded, but after failing to reach a new high, it returned to run near the average daily line, finally closing lower at $2,680.5/mt, down $17.5/mt, a decrease of 0.65%. Trading volume reduced to 10,766 lots, and open interest decreased by 2,665 lots to 219,000 lots. Overnight, LME zinc recorded a bearish candlestick, with the 5-day moving average below forming support. LME zinc inventory decreased by 1,700 mt to 234,675 mt, a drop of 0.72%. The US July ISM Manufacturing PMI fell to 46.8, lower than expected, and initial jobless claims for the week rose to the highest level in nearly a year. Weak labor and economic data led LME zinc to first decline and then rise, maintaining a high level.

Overnight, the most-traded SHFE zinc 2409 contract opened at 22,845 yuan/mt. After the opening, SHFE zinc quickly rose to a high of 23,040 yuan/mt, then fell back below the average daily line due to long positions reducing, with a low of 22,830 yuan/mt during the period. It finally closed higher at 22,860 yuan/mt, up 75 yuan/mt, an increase of 0.33%. Trading volume reduced to 89,047 lots, and open interest decreased by 94 lots to 88,286 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 10-day moving average below providing support. As of August 1, SMM domestic zinc ingot inventory decreased by 7,600 mt to 151,500 mt. The continued decline in domestic zinc ingot inventory provided some support for zinc prices, together with the pull of overseas futures prices, SHFE zinc swung on a strong note.