Increased Supply and Improved Consumption Expectations Zinc Prices May Maintain Fluctuating Trend [SMM Zinc Morning Comment]

Last Friday, Trump: The US Air Force is advancing the development of a sixth-generation fighter jet, to be called the F-47; US Fed's Williams: The current moderately restrictive monetary policy is "entirely appropriate"; Russian Presidential Press Secretary: Putin and Trump agreed to continue engagement as necessary; Sources: The White House has begun reviewing a second round of large-scale layoffs at federal agencies; Lan Foan: The central government is putting up "real money" to strongly promote consumption; PBOC Q1 meeting: Suggested increasing the intensity of monetary policy regulation, and to cut RRR and interest rates when appropriate; Ministry of Commerce: To continue imposing anti-dumping duties on imported resorcinol from Japan.

Last Friday, LME zinc opened at $2,927.5/mt, initially rising slightly to reach $2,927.5/mt, then quickly falling. During this time, LME zinc attempted to rise above the daily average line but was resisted by increased shorts, pulling back to a low of $2,900/mt. It then recovered some losses, centering around $2,920/mt with fluctuating trends, finally closing at $2,927.5/mt, up $8.5/mt, or 0.29%. Trading volume decreased to 68,461 lots, while open interest increased by 1,834 lots to 22.5 lots. On March 21, LME zinc inventory fell by 825 mt to 154,400 mt, a decrease of 0.53%. Last Friday, LME zinc recorded a long-lower-shadow doji, with the 5-day moving average forming resistance above and the 20/60-day moving averages providing support below. As US Fed officials indicated no rush to cut interest rates, the strengthening US dollar suppressed LME zinc's upward trend, while overseas inventories decreased, maintaining a fluctuating trend for LME zinc.

Last Friday, the most-traded SHFE zinc 2505 contract opened at 23,810 yuan/mt. With increased longs, it rose slightly to 24,010 yuan/mt, then oscillated around 23,950 yuan/mt, touching a low of 23,810 yuan/mt, and finally closed at 23,980 yuan/mt, up 210 yuan/mt, or 0.88%. Trading volume decreased to 102,000 lots, and open interest fell by 729 lots to 124,000 lots. Last Friday, SHFE zinc recorded a positive candle, with the 60-day moving average forming resistance above and the 20/40-day moving averages providing support below. Due to YoY increases in both imported zinc concentrates and refined zinc, and the gradual recovery of domestic consumption, the macro outlook for promoting domestic consumption is optimistic, and zinc prices are expected to maintain a fluctuating trend in the short term.