Weak consumption expectations, SHFE zinc weakens [SMM Zinc Morning Comment]

SMM, May 30:

Overnight, LME zinc opened at $2,685.5/mt. In the early session, LME zinc consolidated along the daily moving average. Later, as bulls increased their positions, LME zinc rallied, reaching a high of $2,728/mt during European trading hours. Subsequently, as bears increased their positions, LME zinc fluctuated downward, hitting a low of $2,669.5/mt at the end of the session. It eventually closed at $2,670/mt, down $19/mt or 0.71%. Trading volume increased to 9,466 lots, while open interest rose by 3,084 lots to 211,000 lots. Overnight, LME zinc recorded a long upper shadow bearish candlestick, with the 5/10-day moving averages acting as resistance. Affected by tariff uncertainties, market concerns were triggered, causing LME zinc to fall under pressure, with its center pulling back.

Overnight, the most-traded SHFE zinc 2507 contract opened at 22,450 yuan/mt. In the early session, SHFE zinc quickly rallied to a high of 22,465 yuan/mt. Later, as bulls reduced their positions, SHFE zinc's center pulled back, oscillating below the daily moving average. During this period, it hit a low of 22,300 yuan/mt. It eventually closed at 22,365 yuan/mt, down 130 yuan/mt or 0.58%. Trading volume decreased to 70,875 lots, while open interest fell by 2,972 lots to 116,000 lots. Overnight, SHFE zinc recorded a small bearish candlestick. Despite the continued support from declining domestic inventory for zinc prices, tariff uncertainties persisted. Coupled with gradually weakening consumption, SHFE zinc fell under pressure and is expected to continue oscillating today.