SHFE Zinc Opened Higher with a Gap, but Upward Momentum Was Insufficient [SMM Zinc Morning Comment]

SMM September 8 News:

Last Friday, LME zinc opened at $2,841.5/mt, initially dipped to $2,836.5/mt, then rose steadily above the daily average line to a high of $2,885/mt. During the night session, it pulled back below the daily average line, finally closing up at $2,857.5/mt, gaining $19.5/mt (0.69%). Trading volume decreased to 87,907 lots, while open interest increased by 1,037 lots to 199,000. LME zinc inventory dropped by 700 mt to 54,050 mt, down 1.28%. LME zinc formed a bullish candlestick with a long upper shadow, supported by the 10/40-day moving averages. Affected by disappointing non-farm payrolls data, the US dollar index continued to decline, providing upward momentum for LME zinc.

Last Friday, the most-traded SHFE zinc 2510 contract opened at 22,250 yuan/mt. After opening, bears reduced positions, pushing it to a high of 22,350 yuan/mt. Subsequently, bears increased positions, causing it to decline below the daily average line to a low of 22,150 yuan/mt. At the session's end, bears reduced positions again, stabilizing the price and maintaining a fluctuating trend. It finally closed up at 22,170 yuan/mt, gaining 15 yuan/mt (0.07%). Trading volume decreased to 79,306 lots, while open interest dropped by 3,363 lots to 108,000. SHFE zinc formed a bearish candlestick with a long upper shadow, supported by the lower Bollinger Band. Driven by LME performance, SHFE zinc opened higher with a gap. Current downstream demand remains weak, limiting upward momentum, but low overseas inventory provides some support. SHFE zinc is expected to maintain a fluctuating trend in the short term.