Downstream Consumption Gradually Recovers, SHFE Zinc Maintains Fluctuating Trend [SMM Zinc Morning Comment]

SMM, February 11:

Overnight, LME zinc opened at $2,843/mt. After the opening, LME zinc fluctuated around the daily moving average. During the midday session, it quickly declined to a low of $2,822/mt, then rebounded from the low, reaching a high of $2,854.5/mt by the end of the session. It ultimately closed higher at $2,854/mt, up by $12/mt or 0.42%. Trading volume decreased to 5,937 lots, while open interest increased by 1,080 lots to 227,000 lots. Overnight, LME zinc recorded a bullish candlestick, with support provided by the 5-day moving average. The US raised import tariffs on steel and aluminum, and the US dollar index opened higher with a gap, exerting some pressure on zinc prices. However, the persistently low LME inventory continued to support LME zinc, which hovered at highs.

Overnight, the most-traded SHFE zinc 2503 contract opened at 23,730 yuan/mt. After the opening, SHFE zinc fluctuated rangebound around the daily moving average, then slightly declined to a low of 23,670 yuan/mt. Subsequently, SHFE zinc rebounded above the daily moving average, reaching a high of 23,815 yuan/mt during the session, and ultimately closed lower at 23,785 yuan/mt, down by 20 yuan/mt or 0.08%. Trading volume decreased to 40,277 lots, while open interest decreased by 127 lots to 92,416 lots. Overnight, SHFE zinc recorded a bullish candlestick, with support provided by the 10-day moving average. On Monday, SMM zinc inventory increased by 11,700 mt to 118,700 mt, and social inventory of zinc ingots continued to accumulate. However, downstream enterprises gradually resumed production after the holiday, and demand for zinc ingots is recovering. SHFE zinc hovered at highs.