SHFE Zinc Lacks Upward Momentum, Short-Term Range-Bound Trading Dominates [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $2,870/mt. In early trading, it moved sideways around $2,865/mt. During European trading hours, bulls increased positions, driving a rapid rally to test $2,900/mt. Subsequently, bears entered while longs exited, causing a sharp decline and forming a "V"-shaped reversal, with the center returning to $2,865/mt. It finally closed at $2,869.5/mt, up $4/mt (0.14%). Trading volume rose to 14,264 lots, while open interest fell by 866 lots to 196,000. Overnight, LME zinc formed a long upper-shadow bearish candlestick, supported by various moving averages below. Weak US employment data overnight heightened market expectations for an interest rate cut, pushing LME zinc to a near five-month high with an upward shift in its price center.

Overnight, the most-traded SHFE zinc 2510 contract opened at 22,240 yuan/mt. After briefly testing 22,325 yuan/mt in early trading, bears increased positions, triggering a sharp decline that shifted the price center down to around 22,200 yuan/mt. It closed at 22,195 yuan/mt, down 110 yuan/mt (0.49%). Trading volume dropped to 61,576 lots, while open interest rose by 3,817 lots to 109,000. Overnight, SHFE zinc formed a long upper-shadow bearish candlestick, with narrowing KDJ divergence. The contract maintained sideways movement overnight, as mixed expectations for the September peak consumption season and low inventory provided floor support. Short-term focus remains on fund flows, while a bearish stance is maintained for the medium and long term.

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