The concentration of funds increased, and LME zinc held up well [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,818.5/mt. In early trading, it fluctuated around the daily average line. During European trading hours, the price center rose to $2,835/mt, briefly touching a high of $2,840/mt. Entering the night session, the price center dropped below the daily average line before bulls pushed it back above, finally closing up at $2,833/mt, gaining $19/mt (0.68%). Trading volume decreased to 7,410 lots while open interest rose by 1,018 lots to 193,000. LME zinc recorded a three-day winning streak overnight, with the daily candlestick showing an upward shift in price center supported by multiple moving averages. The US dollar index declined overnight amid heightened expectations for US Fed interest rate cuts and independence concerns, coupled with continuous LME inventory drawdowns. The LME 0-3 backwardation structure widened to 14.9 as fund concentration increased, keeping LME zinc fluctuating upward.

Overnight, the most-traded SHFE zinc 2510 contract opened at 22,175 yuan/mt. After briefly touching 22,250 yuan/mt in early trading, its price center moved down to around 22,195 yuan/mt, eventually closing up at 22,195 yuan/mt, gaining 20 yuan/mt (0.09%). Trading volume decreased to 36,354 lots while open interest dropped by 1,043 lots to 115,000. SHFE zinc ended its losing streak and turned positive overnight, with expanding KDJ divergence. Domestic social inventory increased again, showing insufficient upward momentum. With LME outperforming SHFE, the SHFE/LME price ratio further declined, keeping zinc prices range-bound. Market participants should monitor overseas fund movements.

Data source statement: Except for publicly available information, other data are derived from public information, market exchanges, and processed by SMM based on its internal database model, for reference only and not constituting investment advice.