Domestic Surplus Expectations Remain Unchanged, SHFE Zinc Trades in a Volatile Manner [SMM Zinc Morning Comment]

SMM September 15:

Last Friday, the LME zinc contract opened at $2,905.5/mt. At the beginning of the session, it briefly fell to a low of $2,900.5/mt, but then bulls increased their positions, causing LME zinc to fluctuate upward throughout the session. During the night session, it reached a high of $2,960/mt and finally closed up at $2,956/mt, gaining $51/mt, an increase of 1.76%. The trading volume increased to 14,507 lots, and open interest rose by 1,254 lots to 205,000 lots. Last Friday, LME zinc formed a long bullish candlestick, retesting the 5-day daily average. LME zinc inventory fell to 50,525 mt, and expectations for a US Fed interest rate cut in September continued to heat up. With high capital concentration, LME zinc surged significantly.

Last Friday, the most-traded SHFE zinc 2510 contract opened at 22,345 yuan/mt. At the beginning of the session, SHFE zinc fluctuated, then fell to a low of 22,260 yuan/mt as bulls reduced their positions. It then consolidated around the daily average and finally closed down at 22,300 yuan/mt, falling by 5 yuan/mt, a decrease of 0.02%. The trading volume decreased to 40,122 lots, and open interest fell by 2,005 lots to 95,692 lots. Last Friday, SHFE zinc formed a small bearish candlestick. Domestic consumption remains relatively weak, and inventory buildup continues. The supply surplus pattern remains unchanged, but macro sentiment is bullish, and the external market is boosting the domestic market. SHFE zinc's price center is expected to continue to rise today.