Fundamentals show increased supply and weak demand, with the center of SHFE zinc prices declining [SMM zinc morning comment]

SMM News on July 1:

Overnight, LME zinc opened at $2,780.5/mt. After opening, LME zinc fluctuated rangebound around the daily average line, then fluctuated upward to touch a high of $2,785/mt. Subsequently, it fell back from highs and continued to decline, reaching a low of $2,740.5/mt at the end of the session. It finally closed down at $2,741/mt, down by $37.5/mt or 1.35%. Trading volume decreased to 12,088 lots, and open interest decreased by 2,439 lots to 208,000 lots. Overnight, LME zinc recorded a bearish candlestick, with the 5-day moving average providing support below. The market continued to monitor the progress of trade negotiations between Canada and the US. Some investors took profits and exited the market, causing LME zinc to decline from highs, with the center of gravity slightly slipping.

Overnight, the most-traded SHFE zinc 2508 contract opened at 22,380 yuan/mt. After opening, SHFE zinc fluctuated rangebound around the daily average line, touching a high of 22,420 yuan/mt during the session and reaching a low of 22,350 yuan/mt at the end of the session. It finally closed down at 22,365 yuan/mt, down by 130 yuan/mt or 0.58%. Trading volume decreased to 51,262 lots, and open interest decreased by 1,350 lots to 139,000 lots. Overnight, SHFE zinc recorded a bearish candlestick, with the 5-day moving average forming resistance above. The production increase of domestic smelters gradually materialized. On Monday, SMM zinc social inventory continued to accumulate. The zinc fundamentals showed an increase in supply and weak demand, coupled with the weakening of the LME market, causing SHFE zinc to pull back slightly during the night session.