Driven by the LME and coupled with an increase in domestic inventory, SHFE zinc recorded a negative bar [SMM Zinc Morning Comment].

Overnight, the number of initial jobless claims in the US was lower than expected; the Premier of Ontario, Canada, stated that the US will grant full or partial tariff exemptions for Canadian automobiles; the EU plans to target US service exports, including large tech companies; the South Korean government will announce emergency measures for automakers in April; Brazilian President Lula announced that retaliatory tariffs will be imposed on US products; two departments stated that the offshore trade stamp duty preferential policy will continue; the Deputy Governor of the central bank mentioned that RRR cuts and interest rate cuts will be implemented based on domestic and overseas economic and financial conditions.

Overnight, LME zinc opened at $2,954.5/mt, initially fluctuating around the daily average line, reaching a high of $2,958.5/mt. During the European trading session, longs reduced positions, causing SHFE zinc to fluctuate downward below the daily average line, hitting a low of $2,893/mt, and finally closing at $2,898/mt, down $54/mt, a decrease of 1.83%. Trading volume increased to 86,561 lots, while open interest decreased by 622 lots to 225,000 lots. Overnight, LME zinc inventory decreased by 2,000 mt to 144,575 mt, a drop of 1.36%. LME zinc recorded a large bearish candle, with the upper Bollinger Band forming resistance and the 40/60-day moving averages providing support. The US initial jobless claims for the week were 224,000, lower than the expected 225,000, indicating resilience in the job market, leading to a decline in LME zinc.

Overnight, the most-traded SHFE zinc 2505 contract opened at 24,000 yuan/mt, initially dropping rapidly below the daily average line as longs reduced positions, hitting a low of 23,865 yuan/mt. Subsequently, a fierce battle between bulls and bears ensued, with SHFE zinc fluctuating around the daily average line, finally closing at 23,880 yuan/mt, down 255 yuan/mt, a decrease of 0.93%. Trading volume decreased to 81,087 lots, while open interest decreased by 7,916 lots to 111,000 lots. SHFE zinc recorded a bearish candle, with the 5-day moving average forming resistance and the 40-day moving average providing support. Driven by the LME, SHFE zinc declined. Meanwhile, SMM data showed an increase in domestic social inventory, weakening support for zinc prices. However, with the continuous recovery of end-use consumption and the expectation of increased domestic spot supply, SHFE zinc is expected to remain volatile in the short term.