SHFE Zinc Records a Bearish Candle, Zinc Prices May Maintain Fluctuating Trend in the Short Term [SMM Zinc Morning Comment]

Overnight, Trump stated that a 25% tariff on the EU, covering automobiles and other goods, is expected to be imposed soon; he ordered the termination of oil transactions with Venezuela. The Ukrainian Prime Minister announced that the government approved a mineral framework agreement with the US, while Zelensky stated that under the agreement, Ukraine is not required to repay the aid already provided by the US. Trump claimed that Russia agreed to the deployment of European peacekeeping forces in Ukraine, which the Kremlin denied. NVIDIA's quarterly report showed total revenue, AI business revenue, and next-quarter revenue outlook all exceeded expectations. CICC and Galaxy Securities issued announcements clarifying merger rumors, stating they had not received any relevant information. The National Financial Regulatory Administration and the National Development and Reform Commission (NDRC) held a seminar on equity investment pilot projects for financial asset investment companies. DeepSeek announced a reduction in API call prices during idle periods, with discounts of up to 75%.

Overnight, LME zinc opened at $2,817/mt. At the beginning of the session, LME zinc fluctuated around the daily moving average. During European trading hours, bears reduced positions, driving LME zinc upward to a high of $2,847.5/mt. Subsequently, LME zinc declined to a low of $2,796/mt. During the night session, it recovered part of the losses but slightly fell at the end, closing up at $2,808/mt, an increase of $2.5/mt or 0.09%. Trading volume decreased to 93,400 lots, and open interest fell by 282 lots to 233,000 lots. Overnight, LME zinc recorded a long upper shadow bearish candlestick, with support provided by the lower Bollinger Band. On February 26, LME zinc inventory increased by 600 mt to 165,375 mt, a rise of 0.36%. Overseas social inventories continued to rise, putting pressure on LME zinc. Trump's frequent tariff policies have created market uncertainty, while the continuous increase in overseas inventories has exerted some resistance to LME zinc's upward movement.

Overnight, the most-traded SHFE zinc 2504 contract opened at 23,605 yuan/mt. At the beginning of the session, SHFE zinc reached a high of 23,645 yuan/mt. Subsequently, with bears increasing positions, SHFE zinc plunged to a low of 23,435 yuan/mt. However, as bears reduced positions, SHFE zinc rebounded, recovering most of the losses and recording a "V"-shaped reversal. It ultimately closed down at 23,550 yuan/mt, a decrease of 15 yuan/mt or 0.06%. Trading volume fell to 55,507 lots, while open interest increased by 1,386 lots to 91,723 lots. Overnight, SHFE zinc recorded a bearish candlestick, with resistance from multiple moving averages above and support from the lower Bollinger Band below. Improvements on the supply side have driven processing fees upward, while downstream consumption demand is expected to gradually recover. The combination of supply easing expectations and potential consumption improvement suggests that zinc prices may maintain a fluctuating trend in the short term. Further attention should be paid to more macro front guidance.