Waiting for More Macro Guidance, SHFE Zinc Fluctuates [[SMM Zinc Morning Comment]]

SMM, April 28:

Overnight, LME zinc opened at $2,649/mt. Early in the session, it quickly dropped to $2,625.5/mt. Subsequently, bulls increased their positions, causing LME zinc to fluctuate upward. It reached a high of $2,657.5/mt during the night session. However, the upward momentum weakened, and LME zinc fluctuated downward, eventually trading near the daily average line at the end of the session. It closed up at $2,654/mt, gaining $8.5/mt or 0.32%. Trading volume decreased to 7,562 lots, while open interest increased by 2,089 lots to 207,000 lots. Overnight, LME zinc recorded a small bullish candlestick, with the 5/10-day moving averages providing support below. Trump believed that no red lines would change the tariff policy, raising market concerns about the trade outlook. The US dollar index weakened, LME inventory continued to decline, and the center of LME zinc prices rebounded.

Overnight, the most-traded SHFE zinc 2506 contract opened at 22,520 yuan/mt. Early in the session, SHFE zinc briefly rose, reaching a high of 22,560 yuan/mt. Subsequently, bulls exited their positions, causing SHFE zinc to decline and touch a low of 22,465 yuan/mt. It then fluctuated near the daily average line, with fluctuations of less than 100 yuan. It closed up at 22,530 yuan/mt, gaining 10 yuan/mt or 0.04%. Trading volume decreased to 42,847 lots, while open interest decreased by 465 lots to 117,000 lots. Overnight, SHFE zinc recorded a small bullish candlestick. From a fundamental perspective, expectations for mine production increase are insufficient, but consumption growth is limited. SHFE zinc is expected to continue fluctuating.