Fundamentals show increased supply and weak demand, with SHFE zinc maintaining a fluctuating trend [SMM zinc morning comment]

SMM News on August 1:

Overnight, LME zinc opened at $2,779/mt. Early in the session, LME zinc reached a high of $2,805/mt, then fluctuated downward along the daily average line, hitting a low of $2,742/mt near the close, and finally closed at $2,762/mt, down $33.5/mt or 1.2%. Trading volume increased to 11,799 lots, and open interest rose by 1,164 lots to 190,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the 5-day moving average acting as resistance. The US June PCE index exceeded expectations unexpectedly, the US dollar index continued to rise, and tariff uncertainties remained, causing LME zinc to continue fluctuating downward.

Overnight, the most-traded SHFE zinc 2509 contract opened at 22,300 yuan/mt. Early in the session, SHFE zinc briefly fluctuated downward to hit a low of 22,285 yuan/mt, then rose continuously, reaching a high of 22,425 yuan/mt during the session before maintaining a rangebound fluctuating trend. It finally closed at 22,400 yuan/mt, up 55 yuan/mt or 0.25%. Trading volume decreased to 44,861 lots, and open interest fell by 1,593 lots to 109,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 40-day moving average acting as resistance. SMM expects domestic refined zinc production to continue rising in August, with the supply-increasing and demand-weakening pattern on the fundamentals side remaining unchanged. SHFE zinc will maintain a fluctuating trend overnight, and attention should be paid to changes in macro sentiment.