Fundamental Support Weakens, Zinc Prices Fluctuate at Low Levels [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $2,854.5/mt. In early trading, LME zinc consolidated around the daily moving average, then bulls increased positions, pushing the center of LME zinc upward, reaching a high of $2,906/mt during the night session. By the end of the session, profit-taking by bulls caused the center to shift downward to $2,870/mt, and it ultimately closed higher at $2,862.5/mt, up by $2.5/mt or 0.09%. Trading volume decreased to 11,363 lots, while open interest increased by 1,351 lots to 218,000 lots. Last Friday, LME zinc formed a long upper shadow candlestick, with resistance from various moving averages above. LME inventory decreased by 2,825 mt to 214,075 mt, a drop of 1.3%, marking a reduction in LME inventory. Strong non-farm payrolls data reinforced expectations that the US Fed would not implement significant interest rate cuts this year. A stronger US dollar limited the upside room for LME zinc.

Last Friday, the most-traded SHFE zinc 2502 contract opened at 24,300 yuan/mt. In early trading, shorts pressured SHFE zinc downward, hitting a low of 24,145 yuan/mt. Subsequently, as shorts exited, SHFE zinc rebounded upward, recording a V-shaped reversal and reaching a high of 24,355 yuan/mt. Later, the center fluctuated downward to around 24,210 yuan/mt, and it ultimately closed higher at 24,215 yuan/mt, up by 70 yuan/mt or 0.29%. Trading volume decreased to 69,302 lots, while open interest decreased by 388 lots to 97,533 lots. Last Friday, SHFE zinc formed a bearish candlestick, but the MACD bearish bars narrowed. After falling below the previous low of 24,000 yuan/mt, SHFE zinc lacked sufficient downward momentum due to continued destocking in social inventory, maintaining a primarily low-level fluctuation.