LME zinc in the doldrums dragged down by domestic zinc prices [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,661/mt. In the early session, a tug-of-war between longs and shorts ensued, with the bulls gaining the upper hand and pushing prices to a high of $2,680/mt. Subsequently, bears launched a high-level attack, causing LME zinc to dive and its center to shift downwards to around $2,650/mt. Entering the night session, LME zinc accelerated its decline, probing a low of $2,635.5/mt. The center rebounded to oscillate around the daily average line towards the end of the session, ultimately closing down at $2,654/mt, down $8.5/mt or 0.32%. Trading volume decreased to 9,514 lots, while open interest increased by 464 lots to 217,000 lots. Overnight, LME zinc recorded a four-day losing streak, with the 40-day moving average turning into a resistance line. Dragged down by the weak performance of domestic zinc prices overnight, bears increased their positions, pushing the center of LME zinc downwards. Attention should be paid to the results of the Sino-US trade negotiations in the future.

Overnight, the most-traded SHFE zinc 2507 contract opened at 21,945 yuan/mt. In the early session, the center of SHFE zinc slightly dipped, probing a low of 21,830 yuan/mt. Subsequently, as bears reduced their positions and exited the market, the center of SHFE zinc shifted upwards to above the daily average line. It ultimately closed down at 21,925 yuan/mt, down 200 yuan/mt or 0.9%. Trading volume decreased to 73,165 lots, while open interest decreased by 340 lots to 135,000 lots. Overnight, SHFE zinc recorded a bearish candlestick, with various moving averages above forming resistance. Overnight, social inventory continued to build up, and bearish sentiment was strong in the market. However, downstream buying power was strong at low prices, and there was a tendency for bears to take profits, limiting the downside room for zinc prices.