Geopolitical risks ease, SHFE zinc expected to remain volatile today [SMM zinc morning comment]

SMM News on June 24:

Overnight, LME zinc opened at $2,644.5/mt. Early in the session, LME zinc briefly dipped to a low of $2,628/mt before bulls increased their positions, driving LME zinc to rise steadily. It hit a high of $2,690/mt towards the end of the session and eventually closed up at $2,686/mt, gaining $37/mt or 1.40%. Trading volume increased to 12,083 lots, while open interest rose by 1,944 lots to 210,000 lots. Overnight, LME zinc recorded a large bullish candlestick. Iran has accepted the ceasefire proposal, cooling geopolitical conflict risks. Additionally, US Fed officials made dovish remarks, causing the US dollar to pull back and zinc prices to fluctuate upward.

Overnight, the most-traded SHFE zinc 2508 contract opened at 21,875 yuan/mt. Early in the session, SHFE zinc consolidated along the daily average line before bulls increased their positions, driving SHFE zinc to quickly rise and hit a high of 22,030 yuan/mt. It eventually closed up at 21,995 yuan/mt, gaining 215 yuan/mt or 0.99%. Trading volume decreased to 95,930 lots, while open interest rose by 7,042 lots to 118,000 lots. Overnight, SHFE zinc recorded a large bullish candlestick, retracing to the 20-day moving average. Some smelters in South China were affected by heavy rain, but this did not change the trend of easing supply. Consumption margins weakened, and initial operating rates mostly declined MoM. Fundamentals were weak, putting pressure on zinc price trends. However, the pace of inventory buildup fluctuated, causing SHFE zinc to fluctuate upward.