Non-farm payrolls data higher than expected, LME zinc posts three consecutive days of decline [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $2,689/mt. After a brief decline in the early session, its price center shifted above the daily moving average. After hitting a high of $2,701/mt, bulls reduced their positions during European trading hours, causing LME zinc to dive and its price center to move down to oscillate near $2,665/mt. It eventually closed down at $2,662.5/mt, down $25.5/mt or 0.95%. Trading volume decreased to 10,645 lots, while open interest fell by 851 lots to 217,000 lots. Last Friday, LME zinc recorded three consecutive bearish candlesticks, with the 40-day moving average providing support below. Non-farm payrolls data released last Friday exceeded expectations, dampening expectations for US Fed interest rate cuts within the year. The US dollar strengthened, and LME zinc followed suit by declining. It is expected that zinc prices will maintain a fluctuating trend in the short term.

Last Friday, the most-traded SHFE zinc 2507 contract opened lower with a gap at 22,275 yuan/mt. As bulls reduced their positions, SHFE zinc operated in the doldrums around the daily moving average, with an oscillation range of less than 100 yuan/mt. It eventually closed down at 22,225 yuan/mt, down 85 yuan/mt or 0.38%. Trading volume decreased to 69,346 lots, while open interest fell by 159 lots to 119,000 lots. Last Friday, SHFE zinc recorded a bearish candlestick, with the daily candlestick's center moving down and the KDJ indicator's divergence widening downwards. The supply side of zinc fundamentals is expected to continue increasing, while consumption is in the traditional off-season, providing insufficient fundamental support. In the short term, attention should be paid to inventory performance.