Macro Sentiment Improves, SHFE Zinc Continues to Rise [SMM Zinc Morning Comment]

Overnight, Trump signed an amendment to temporarily suspend tariffs on Mexico and Canada goods that comply with the agreement; the US and Ukraine plan to hold talks in Saudi Arabia next week to discuss a preliminary Russia-Ukraine ceasefire; US Fed Governor Waller stated that there is no need for an interest rate cut in March, and the expectation of two interest rate cuts this year remains reasonable; US Treasury Secretary Besant announced plans to shut down Iran's oil industry, drone manufacturing capabilities, and its access to the global financial system; the European Central Bank cut interest rates by 25 basis points as expected; the National Development and Reform Commission (NDRC) announced plans to promote the establishment of a "carrier-class" national venture capital guidance fund, which is expected to attract and drive nearly 1 trillion yuan in local and social capital; the People's Bank of China stated that it will cut the reserve requirement ratio (RRR) and interest rates at an appropriate time this year and will innovatively launch a "technology board" in the bond market.

Overnight, LME zinc opened at $2,887/mt. In early trading, LME zinc briefly dipped to a low of $2,878.5/mt before its center shifted upward, fluctuating near the daily average line. By the European trading session, bulls increased their positions, driving LME zinc to fluctuate upward, peaking at $2,931/mt during the night session. It ultimately closed higher at $2,926/mt, up $40/mt or 1.39%. Trading volume increased to 13,503 lots, and open interest rose by 449 lots to 223,000 lots. Overnight, LME zinc recorded a large bullish candlestick. The US dollar index declined for the fourth consecutive day, and Trump's signing of the amendment to suspend tariffs on Mexico and Canada goods eased market concerns over tariffs. Base metals broadly rose, and LME zinc's rally is expected to maintain high-level fluctuations.

Overnight, the most-traded SHFE zinc 2504 contract opened at 24,100 yuan/mt. In early trading, SHFE zinc fluctuated along the daily average line. Bears exited the market, while bulls entered, driving SHFE zinc upward, peaking at 24,160 yuan/mt by the session's end. It ultimately closed higher at 24,150 yuan/mt, up 150 yuan/mt or 0.63%. Trading volume decreased to 62,947 lots, and open interest fell to 91,409 lots. Overnight, SHFE zinc recorded a small bullish candlestick. The Bollinger Bands' middle track formed resistance above, while the 40-day moving average provided support below. Macro sentiment improved as the US temporarily suspended tariffs on Mexico and Canada goods. Domestically, the NDRC announced plans to promote the establishment of a "carrier-class" national venture capital guidance fund, expected to attract and drive nearly 1 trillion yuan in local and social capital. The People's Bank of China stated that it will cut interest rates at an appropriate time this year. SHFE zinc's center shifted upward, and zinc prices are expected to primarily fluctuate at high levels.