Domestic inventory recorded a decrease, SHFE zinc center moved upward [SMM Zinc Morning Comment]

Overnight, Trump is expected to announce reciprocal tariffs at the White House Rose Garden on April 2. US Fed's Williams stated that the current economy is not experiencing stagflation. Iran issued a warning against Trump's threats. *Qiushi* published an important article by Xi Jinping titled "Striving Towards the Grand Goal of Building a Strong Nation in Science and Technology." The National Bureau of Statistics reported that the March PMI was 50.5%. The Ministry of Finance announced the arrangements for government bond issuance in Q2 2025. The PBOC conducted 800 billion yuan in reverse repo operations in March.

Overnight, LME zinc opened at $2,864.0/mt, reaching its intraday high at the opening. Early in the session, shorts increased their positions, causing LME zinc to plunge and hit a low of $2,826/mt during European trading hours. Subsequently, shorts took profits and exited, leading to a shift in the center of LME zinc prices, which eventually closed up at $2,853.5/mt, an increase of $2/mt or 0.07%. Trading volume decreased to 10,256 lots, and open interest fell by 941 lots to 222,000. Overnight, LME zinc recorded a long lower shadow candlestick. US Fed officials denied stagflation, and the market continued to digest concerns over the economic outlook due to the impending implementation of reciprocal tariffs. However, the continuous decline in LME inventory provided support, resulting in LME zinc trading within a range.

Overnight, the most-traded SHFE zinc 2505 contract opened at 23,450 yuan/mt. Initially, SHFE zinc fluctuated near the daily average line before plunging to a low of 23,355 yuan/mt. Subsequently, shorts exited, causing the center of SHFE zinc prices to shift, and it traded around 23,505 yuan/mt, eventually closing up at 23,505 yuan/mt, an increase of 50 yuan/mt or 0.21%. Trading volume decreased to 74,722 lots, and open interest fell by 3,000 lots to 114,000. Overnight, SHFE zinc recorded a small bullish candlestick. According to SMM, April's refined zinc production slightly exceeded expectations, with domestic zinc ingot supply remaining relatively loose. However, social inventory recorded a decline, and domestic consumption remained resilient. The center of SHFE zinc prices shifted upward, and the market is still awaiting the BM results. SHFE zinc is expected to continue trading within a range in the short term.