SHFE Zinc Records a Bullish Candlestick, Expected to Fluctuate Downward in the Short Term [SMM Zinc Morning Comment]

Last Friday, the meeting between Trump and Zelensky at the White House ended on a sour note, with U.S. officials suggesting that Ukraine might need new leadership. Ukraine and the UK signed a loan agreement, and it is reported that the UK, France, and Ukraine will jointly propose a Ukraine peace plan to the U.S. The U.S. Commerce Secretary stated that additional tariffs on Canada and Mexico will be imposed on March 4, with the tariff levels to be determined by Trump. The U.S. Democratic Party claimed that Republicans have withdrawn from budget negotiations, increasing the risk of a government "shutdown." The U.S. January PCE data was largely in line with expectations, and the Atlanta Fed model predicts that U.S. Q1 GDP growth will turn negative. Macron stated that if the U.S. confirms a 25% tariff on Europe, Europe will respond with "reciprocal" measures. Trump announced a reserve target for cryptocurrency. President Xi Jinping emphasized that preventing and mitigating various risks is a key task in building a safe China. The CSRC stated that conditions are not yet in place to establish the Chongqing Stock Exchange. Additionally, the conditions for launching ETFs based on REITs are not yet fully met. DeepSeek disclosed that the theoretical cost-profit ratio is 545%, and the theoretical daily profit of the V3/R1 inference system reaches 3.46 million yuan.

Last Friday, LME zinc opened at $2,807/mt. At the beginning of the session, bulls reduced positions, and LME zinc trended downward, hitting a low of $2,772/mt during European trading hours. Subsequently, bears took profits and exited, leading LME zinc to fluctuate upward, peaking at $2,814.5/mt during the night session. Later, the center gradually pulled back to near the daily moving average, closing down at $2,798/mt, a decrease of $11.5/mt or 0.41%. Trading volume increased to 11,290 lots, while open interest decreased by 3,902 lots to 226,000 lots. Last Friday, LME zinc recorded a long lower-shadow bearish candlestick. Trump's upcoming tariff policy has raised concerns about its impact on the global economy, weighing on the performance of base metals. Meanwhile, inflation data met expectations, and the strengthening U.S. dollar continued to pressure base metals. However, LME zinc is expected to fluctuate in the short term.

Last Friday, the most-traded SHFE zinc 2504 contract opened at 23,495 yuan/mt. At the beginning of the session, shorts reduced positions, and SHFE zinc quickly surged, peaking at 23,640 yuan/mt. Subsequently, bulls reduced positions, and SHFE zinc fluctuated downward to below the daily moving average, consolidating around 23,510 yuan/mt. It eventually closed higher at 23,510 yuan/mt, up 85 yuan/mt or 0.36%. Trading volume decreased to 70,890 lots, while open interest fell by 3,676 lots to 93,231 lots. Last Friday, SHFE zinc recorded a small bullish candlestick with a long upper shadow, with resistance formed by the 10-day and 20-day moving averages above. Macro sentiment weakened, geopolitical impacts persisted, zinc concentrate TC continued to rise, and supply expectations remained relatively loose. Meanwhile, downstream consumption is still recovering. Zinc prices are expected to fluctuate downward in the short term.