SHFE zinc opens higher with a gap, short-term volatility expected [SMM Zinc Morning Comment]

SMM August 27 News:

Overnight, LME zinc opened at $2,804.5/mt. At the beginning of the session, LME zinc fluctuated around the daily average. During the European trading hours, LME zinc fell below the daily average, reaching a low of $2,787.5/mt. Subsequently, with bears reducing positions, LME zinc fluctuated upward, peaking at $2,827/mt. Towards the end of the session, LME zinc pulled back slightly and finally closed at $2,807/mt, up by $1.5/mt, or 0.05%. Trading volume increased to 73,711 lots, while open interest decreased by 1,817 lots to 191,000 lots. On August 26, LME zinc inventory decreased by 2,550 mt to 65,525 mt, a decline of 3.75%. Overnight, LME zinc recorded a bullish candlestick, supported by the 40- and 60-day moving averages. It was reported that the Trump administration is considering measures affecting regional Feds. The US dollar index pulled back under the influence of the US Fed turmoil, and overseas inventories continued to decrease, both supporting LME zinc's rise.

Overnight, the most-traded SHFE zinc 2510 contract opened higher with a gap at 22,310 yuan/mt. At the start of the session, with bears reducing positions, SHFE zinc quickly rose above the daily average, reaching a high of 22,425 yuan/mt. However, as bulls reduced their positions, SHFE zinc fell below the daily average. Subsequently, SHFE zinc fluctuated rangebound around 22,350 yuan/mt, finally closing at 22,355 yuan/mt, up by 85 yuan/mt, or 0.38%. Trading volume decreased to 53,355 lots, while open interest decreased by 602 lots to 108,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, supported by the 60-day moving average. Driven by the LME, SHFE zinc opened higher with a gap. Recently, export orders in some terminal sectors have shown slight improvement, coupled with the continuous reduction in overseas inventories, providing some support for the bottom of SHFE zinc.