SHFE Zinc Closed for Chinese New Year Holiday, Expected to Fluctuate Downward Subsequently [SMM Zinc Morning Comment]

Overnight, US job vacancies hit their lowest level since September last year; Trump signed a memorandum to block Iran's nuclear weapons program and restrict its oil sales; Crypto Czar David Sacks is studying the feasibility of Bitcoin reserves; Morgan Stanley no longer expects the US Fed to cut interest rates in March; China's Ministry of Commerce has added the US-based PVH Group and Illumina Inc. to its unreliable entity list; China will impose an additional 10%-15% tariff on certain imports originating from the US.

Overnight, LME zinc opened at $2,817/mt. At the beginning of the session, LME zinc fluctuated along the daily moving average. By the European trading hours, it quickly declined to a low of $2,784.5/mt. Subsequently, bulls increased their positions, pushing LME zinc upward to a high of $2,834/mt during the night session. It then fluctuated near $2,818/mt at the end of the session and closed higher at $2,812/mt, up by $3.5/mt or 0.12%. Trading volume decreased to 10,798 lots, while open interest increased by 2,119 lots to 228,000 lots. Overnight, LME zinc recorded a small bearish candlestick, with resistance from the 20-day moving average above and support from the 5-day moving average below. The US delayed imposing tariffs on Canada and Mexico by one month, easing market concerns. However, worries about subsequent demand persist. With US job vacancies at their lowest level since last September and the likelihood of a US Fed interest rate cut in March decreasing, LME zinc is expected to fluctuate downward in the short term. Attention should be paid to the release of subsequent domestic policies.

Overnight, SHFE zinc was closed due to the Chinese New Year holiday. After the holiday, downstream and end-user sectors of zinc will gradually resume operations, but support for zinc prices remains weak. In the short term, zinc prices are expected to fluctuate downward.