Caixin PMI Returns to Expansion Territory, SHFE Zinc Focus Shifts Upward [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,088/mt. Initially, with bulls increasing their positions, LME zinc fluctuated upward. Subsequently, with bears increasing their positions, LME zinc declined, hitting a low of $3,023/mt during European trading hours. Later, as bears reduced their positions, LME zinc fluctuated upward again, reaching a high of $3,088/mt during the night session. However, it lacked upward momentum and its focus fell back, ultimately closing up at $3,066/mt, an increase of $28.5/mt or 0.94%. Trading volume decreased to 12,774 lots, and open interest fell by 2,911 lots to 252,000 lots. Last Friday, LME zinc recorded a bullish candlestick, with LME inventory increasing by 350 mt to 247,075 mt, a decrease of 0.65%. On the macro front, US October non-farm payrolls data was unexpectedly weak, enhancing the likelihood of an interest rate cut, weakening the US dollar, and shifting LME zinc's focus upward. LME zinc is expected to fluctuate at high levels today.

Last Friday, the most-traded SHFE zinc 2412 contract opened at 25,030 yuan/mt. Initially, SHFE zinc briefly touched a high of 25,390 yuan/mt. Subsequently, lacking upward momentum, SHFE zinc's focus shifted downward to 24,985 yuan/mt, fluctuating and consolidating, hitting a low of 24,890 yuan/mt during the period. It ultimately closed up at 24,970 yuan/mt, an increase of 105 yuan/mt or 0.42%. Trading volume decreased to 126,000 lots, and open interest fell by 2,714 lots to 109,000 lots. Last Friday, the most-traded SHFE zinc contract recorded a long upper shadow bearish candlestick. Macro sentiment revived, with US non-farm payrolls data unexpectedly weak, reigniting expectations of a US Fed interest rate cut. Domestic Caixin PMI data returned to expansion territory, shifting SHFE zinc's focus upward. Attention still needs to be paid to the backwardation structure, and SHFE zinc is expected to fluctuate at high levels today.