Macro-level tug-of-war between longs and shorts, zinc prices maintain sideways movement [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,661/mt. In the early session, LME zinc fluctuated upward along the daily moving average, reaching a high of $2,692/mt during European trading hours. Subsequently, as bulls took profits and exited their positions, LME zinc fluctuated downward, hitting a low of $2,647/mt at the end of the session. It eventually closed at $2,651/mt, down $7.5/mt or 0.28%. Trading volume increased to 9,627 lots, while open interest decreased by 4,563 lots to 209,000 lots. Overnight, LME zinc recorded a long upper shadow bearish candlestick, with the 5/40-day moving averages acting as resistance above. Although US CPI data came in below expectations across the board overnight, raising market expectations for an interest rate cut, the international environment remains challenging. Additionally, the market is closely watching for more details on the US-China negotiations, with LME zinc maintaining a fluctuating trend.

Overnight, the most-traded SHFE zinc 2507 contract opened at 22,100 yuan/mt. In the early session, bulls reduced their positions, and SHFE zinc consolidated briefly near the daily moving average before declining steadily, with its center of gravity operating below the daily moving average. It eventually closed at the day's low of 22,000 yuan/mt, down 20 yuan/mt or 0.09%. Trading volume decreased to 48,580 lots, while open interest decreased by 226 lots to 126,000 lots. Overnight, SHFE zinc recorded a bearish candlestick without a lower shadow, with the 10/40-day moving averages acting as resistance above. Overnight, zinc prices maintained sideways movement, with a tug-of-war between longs and shorts in macro sentiment. On the fundamentals side, supply-side pressure increased, with imported zinc still arriving. Downstream consumption is in the off-season, but previous low prices have stimulated downstream restocking demand. Attention should be paid to today's inventory performance, as there may be temporary support at round-number levels.