Inventory buildup falls short of expectations, SHFE zinc holds up well [SMM Zinc Morning Comment]

SMM June 30th News:

On Friday, LME zinc opened at $2,768.5/mt. In the early session, LME zinc maintained a fluctuating trend, then dropped in the afternoon session, reaching a low of $2,741/mt before rebounding again. Near the close, it hit a high of $2,782/mt, ultimately closing up at $2,778.5/mt, up $8.5/mt or 0.31%. Trading volume decreased to 12,465 lots, and open interest decreased by 962 lots to 210,000 lots. On Friday, LME zinc recorded a bullish candlestick, with the 5-day moving average providing support below. The US dollar index maintained a fluctuating trend, but LME zinc inventory continued to decline to a yearly low, continuously supporting zinc prices. The macro sentiment remained unchanged, and LME zinc fluctuated at highs.

On Friday, the most-traded SHFE zinc 2508 contract opened at 22,330 yuan/mt. In the early session, SHFE zinc reached a low of 22,330 yuan/mt, then rose continuously to hit a high of 22,485 yuan/mt. It ultimately closed up at 22,460 yuan/mt, up 50 yuan/mt or 0.22%. Trading volume decreased to 64,238 lots, and open interest increased by 1,155 lots to 144,000 lots. On Friday, SHFE zinc recorded a bullish candlestick, with the 5-day moving average providing support below. Although TCs continued to rise, there were production cuts at large zinc smelters in July, coupled with zinc ingot inventory buildup falling short of expectations. The macro environment still supported zinc prices, and bullish sentiment remained. It is expected that SHFE zinc will continue to hold up well.