Wider supply coupled with weaker consumption, SHFE zinc maintains fluctuating trend [SMM Zinc Morning Comment]

SMM News on June 18:

Overnight, LME zinc opened at $2,654.5/mt. Early in the session, LME zinc continued to decline below the daily average line, then rapidly rose to a high of $2,662.5/mt during European trading hours. Subsequently, LME zinc quickly pulled back and fluctuated considerably along the daily average line during the night session. By the end of the session, LME zinc closed slightly lower at $2,636.5/mt, down $23.5/mt or 0.88%. Trading volume decreased to 90,506 lots, and open interest decreased by 394 lots to 211,000 lots. Overnight, LME zinc recorded a bearish candlestick, with the 20/60-day moving averages above exerting pressure. US retail sales in May fell short of expectations, but consumer spending remained supported by robust wage growth. The US dollar index first fell and then rose. Meanwhile, tensions between Iran and Israel remained high, causing the center of LME zinc to move higher and maintain a fluctuating trend.

Overnight, the most-traded SHFE zinc 2507 contract opened at 21,885 yuan/mt. Early in the session, SHFE zinc dipped to 21,825 yuan/mt. Subsequently, as bears reduced their positions, SHFE zinc rose continuously above the daily average line to a high of 21,975 yuan/mt. Then, as bulls reduced their positions, SHFE zinc fluctuated downward. It finally closed higher at 21,910 yuan/mt, up 5 yuan/mt or 0.02%. Trading volume decreased to 47,302 lots, and open interest decreased by 2,898 lots to 103,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 10/60-day moving averages above exerting pressure. Overnight, SHFE zinc recorded a bullish candlestick, with the 10/60-day moving averages above exerting pressure. Affected by the seasonal off-season, downstream demand is gradually weakening, providing less support for zinc prices. The market still expects an increase in supply. Tensions between Iran and Israel remain high. Follow-up attention should be paid to more macroeconomic news. It is expected that SHFE zinc will maintain in the doldrums in the short term.