US dollar weakens, boosting LME zinc prices [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,720/mt. After a tug-of-war between longs and shorts in the early session, LME zinc consolidated around the daily moving average, with longs increasing their positions, pushing LME zinc higher throughout the session. It reached a high of $2,786/mt during the night session before pulling back slightly at the end of the session. It eventually closed up at $2,761.5/mt, up $41/mt or 1.51%. Trading volume increased to 18,503 lots, while open interest rose by 3,036 lots to 223,000 lots. Overnight, LME zinc recorded a five-day winning streak, with the 40-day moving average turning into a support line and the 5-day moving average acting as resistance above. As global trade tensions ease, metal demand is expected to continue, boosting investor confidence. Coupled with the US dollar's weakness, zinc prices are expected to fluctuate at highs.

Overnight, the most-traded SHFE zinc 2506 contract opened higher with a gap at 22,885 yuan/mt. It oscillated around the daily moving average in the early session before its center slightly dipped below the daily moving average, operating relatively steadily overall. It eventually closed up at 22,800 yuan/mt, up 280 yuan/mt or 1.24%. Trading volume decreased to 73,396 lots, while open interest increased by 391 lots to 105,000 lots. Overnight, SHFE zinc recorded a small bearish candlestick, yet the daily candlestick's center shifted higher, and the KDJ indicator's opening expanded upwards. Amid easing fears of an economic recession, bullish sentiment resurfaced overnight, with non-ferrous metals generally rising. Zinc prices filled the gap from previous declines. Considering the macroeconomic optimism, zinc prices are expected to fluctuate at highs. However, with the anticipated arrival of a large volume of imported zinc ingots, zinc prices may struggle to rise further, and pressure is expected to persist at the next round-number level.