SHFE zinc stops rising and starts to fall; pay attention to the entry of hedging positions [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,858/mt. In the early session, LME zinc extended its downward fluctuation along the daily average line, hitting a low of $2,842/mt. Subsequently, bulls increased their positions, driving LME zinc to fluctuate upward. It reached a high of $2,875/mt during the night session and closed up at $2,860/mt, gaining $6.5/mt or 0.23%. Trading volume decreased to 10,757 lots, while open interest increased by 3,299 lots to 188,000 lots. Overnight, LME zinc recorded a five-day winning streak, with support from various moving averages below and pressure from the upper Bollinger Bands. Recently, the US has reached trade agreements with multiple countries, and China-US trade negotiations have also been scheduled. Market risk aversion sentiment has cooled down, and LME inventory continues to decline. Bullish funds are mainly increasing their positions, and zinc prices remain high.

Overnight, the most-traded SHFE zinc 2509 contract opened at 23,000 yuan/mt. During the session, SHFE zinc fluctuated around the daily average line, with the center slightly moving downward at the end of the session. The fluctuation range did not exceed 100 yuan/mt. It closed up at 22,940 yuan/mt, gaining 35 yuan/mt or 0.15%. Trading volume decreased to 57,871 lots, while open interest decreased by 1,889 lots to 136,000 lots. Overnight, SHFE zinc stopped rising and started to fall, with the KDJ opening narrowing. Overnight, zinc prices briefly broke through 23,000 yuan/mt again but lacked upward momentum. Market sentiment has been somewhat digested, and spot zinc prices are running weakly at a premium in the high-price range. Attention should be paid to the entry of hedging positions amid high zinc prices.

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