Macro sentiment improves, zinc prices rise overall [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $2,638/mt. In the early session, the tug-of-war between longs and shorts saw the bears gain the upper hand, with LME zinc dipping to $2,618/mt. Subsequently, during the European trading session, bulls entered the market at lower levels, driving LME zinc higher and shifting its center above the daily average line. Entering the night session, LME zinc reached a high of $2,661/mt, before pulling back slightly at the end of the session. It ultimately closed up at $2,655.5/mt, gaining $19.5/mt or 0.74%. Trading volume decreased to 11,414 lots, while open interest increased by 3,291 lots to 216,000 lots. Last Friday, LME zinc recorded a bullish candlestick, with the 5-day moving average providing support below. The import window opened, and LME inventory continued to decline. With the supplement of imported zinc, domestic supply was not tight. Zinc prices maintained a fluctuating trend, with attention on the outcome of the China-US negotiations.

Last Friday, the most-traded SHFE zinc 2506 contract opened higher with a gap at 22,360 yuan/mt. In the early session, SHFE zinc reached a high of 22,390 yuan/mt. Subsequently, as bulls took profits and exited the market, SHFE zinc plunged downward, with its center shifting lower to around 22,290 yuan/mt. At the end of the session, SHFE zinc accelerated its downward movement, dipping to 22,210 yuan/mt. It ultimately closed up at 22,260 yuan/mt, gaining 10 yuan/mt or 0.04%. Last Friday, SHFE zinc recorded a small bearish candlestick, but the center of the daily candlestick shifted higher, with the 5-day moving average providing support below. The overall changes in zinc fundamentals were relatively small, with low inventory providing bottom support for zinc prices. Macro-wise, positive signals were released from the China-US negotiations, which are expected to potentially boost zinc prices.