LME strength drives SHFE zinc's center higher [SMM zinc morning comment]

Overnight, LME zinc opened at $2,752/mt. After briefly dipping to $2,743.5/mt in the early session, bulls increased their positions, pushing LME zinc to rise steadily above the daily average line. Entering the night session, it reached a high of $2,803.5/mt, with its center consolidating near $2,790/mt. It eventually closed up at $2,795/mt, gaining $45/mt or 1.64%. Trading volume increased to 10,643 lots, while open interest rose by 162 lots to 191,000 lots. Overnight, LME zinc recorded a three-day winning streak, with the 40-day moving average providing support and the MACD bearish candlestick narrowing. Boosted by the US Fed officials' remarks that raised expectations for an interest rate cut, the US dollar index fell, and non-ferrous metals generally rose. Coupled with the continuous decline in LME inventory to less than 90,000 mt, LME zinc showed a strong trend.

Overnight, the most-traded SHFE zinc 2509 contract opened at 22,480 yuan/mt. In the early session, SHFE zinc quickly reached a high of 22,595 yuan/mt. Subsequently, with short positions entering and long positions exiting, the center of SHFE zinc shifted downward, operating below the daily average line. It eventually closed up at 22,475 yuan/mt, gaining 145 yuan/mt or 0.65%. Trading volume decreased to 57,407 lots, while open interest increased by 1,590 lots to 95,844 lots. Overnight, SHFE zinc stopped rising and started to fall, but the daily candlestick center shifted upward, with the 10/20-day moving averages forming resistance. Driven by the overnight strength in the LME market, the center of SHFE zinc shifted upward, but with a relatively certain increase in supply, the upside room for zinc prices was constrained.

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