Downstream Consumption "Peak Season Fails to Materialize," SHFE Zinc Expected to Continue Fluctuating at Lows [SMM Zinc Morning Comment]

SMM September 12:

       Overnight, LME zinc opened at $2,887.50/mt, initially fluctuating near the daily average line, touching a low of $2,876.50/mt. Entering the night session, LME zinc gradually rose to a high of $2,905.50/mt, finally closing up at $2,905.00/mt, up $17.5/mt, a gain of 0.61%. Trading volume increased to 116,000 lots, and open interest rose by 2,333 lots to 204,000 lots. On September 11, LME zinc inventory decreased by 200 mt to 50,625 mt, a drop of 0.39%. Overnight, LME zinc recorded a bullish candlestick, supported below by the 10/60-day daily averages. US initial jobless claims surged to a four-year high, and weakness in the job market strengthened expectations for the US Fed to cut interest rates, pushing the center of LME zinc continuously higher.

       Overnight, the most-traded SHFE zinc 2510 contract opened at 22,250 yuan/mt, initially briefly dipping to 22,180 yuan/mt. However, increased positions by bulls drove SHFE zinc to gradually rise, touching a high of 22,295 yuan/mt, then fluctuating around 22,265 yuan/mt, finally closing up at 22,280 yuan/mt, up 30 yuan/mt, a gain of 0.13%. Trading volume decreased to 41,779 lots, and open interest fell by 476 lots to 99,966 lots. Overnight, SHFE zinc recorded a bullish candlestick, supported below by the lower Bollinger Band. According to yesterday's SMM inventory data, domestic inventory continued to increase to 154,200 mt. Current downstream consumption is "lackluster during the peak season," yet the decrease in overseas inventories provides some support for zinc prices. SHFE zinc is expected to mainly fluctuate at low levels in the short term.