Social inventory in China continues to increase, while the center of SHFE zinc's daily candlestick continues to move downward [SMM zinc futures brief comment]

SMM reported on August 4:

       The most-traded SHFE zinc 2509 contract opened at 22,200 yuan/mt. After the opening, bulls reduced their positions, causing SHFE zinc to decline and test a low of 22,125 yuan/mt. Subsequently, bears reduced their positions, and SHFE zinc gradually rose above the daily average line. It touched a high of 22,270 yuan/mt near the close and finally closed up at 22,255 yuan/mt, up 5 yuan/mt or 0.02%. Trading volume decreased to 9,948 lots, and open interest decreased by 716 lots to 103,000 lots. SHFE zinc recorded a bullish candlestick, with the 5/20-day moving averages above exerting pressure and the 60-day moving average below providing support. Currently, the positive macro sentiment in China from the previous period has been largely digested. In August, smelters still have expectations for production increase, and mine TCs continue to rise. However, actual consumption on the demand side remains in the doldrums. Meanwhile, according to today's inventory data, SMM's zinc ingot inventory across seven locations continued to increase to 107,300 mt. Zinc prices are expected to face significant pressure under the influence of fundamental logic, but short-term attention should still be paid to macro and capital changes.