Fundamentals remain unchanged, SHFE zinc maintains fluctuating trend [SMM Zinc Morning Comment]

SMM, June 17:

Overnight, LME zinc opened at $2,620/mt. In the early session, LME zinc fluctuated around the daily moving average, dipping to a low of $2,610.5/mt before rapidly rising above the daily moving average to a high of $2,665/mt. Entering the night session, LME zinc briefly dipped below the daily moving average but recovered some of the losses towards the end of the session, closing up at $2,660/mt, up $33.5/mt or 1.28%. Trading volume decreased to 124,000 lots, while open interest increased by 41,145 lots to 248,000 lots. Overnight, LME zinc recorded a large bullish candlestick, with the middle band of the Bollinger Bands acting as resistance above. Foreign media reported that Iran was seeking talks with the US and Israel to end hostilities, while Trump also indicated a delay in imposing sanctions on Russia, easing market tensions and pushing LME zinc's center higher.

Overnight, the most-traded SHFE zinc 2507 contract opened higher with a gap at 21,955 yuan/mt. After opening, SHFE zinc immediately reached a high of 21,985 yuan/mt before fluctuating downward below the daily moving average to a low of 21,865 yuan/mt. It then rose above the daily moving average, with its center fluctuating around 21,950 yuan/mt. Towards the end of the session, bulls reduced their positions, causing SHFE zinc to dip slightly, closing up at 21,935 yuan/mt, up 95 yuan/mt or 0.43%. Trading volume decreased to 58,178 lots, while open interest decreased by 4,413 lots to 112,000 lots. Overnight, SHFE zinc recorded a bearish candlestick, with the 10/60-day moving averages acting as resistance above. Currently, downstream consumption is gradually weakening, while supply-side increases are expected to continue, with demand expected to provide diminishing support for zinc prices. In the short term, zinc prices are expected to remain in the doldrums.