Domestic Minor Destocking Provides Support for SHFE Zinc [SMM Zinc Morning Comment]

SMM September 18:

Overnight, LME zinc opened at $2,948/mt, marking the day's highest price at opening. Subsequently, bulls reduced their positions, causing LME zinc to fluctuate downward throughout the session. It touched a low of $2,904.5/mt during the night session and finally closed down at $2,913/mt, a decrease of $30/mt or 1.02%. Trading volume fell to 11,400 lots, while open interest dropped by 2,995 lots to 213,000 lots. Overnight, LME zinc formed a bearish candlestick with no upper shadow. US initial jobless claims recorded the largest drop in nearly four years, yet market expectations for further interest rate cuts persisted. Nonferrous metals remained under pressure, with some funds taking profits. However, tight LME zinc inventory provided some support. LME zinc is expected to fluctuate today.

Overnight, the most-traded SHFE zinc 2511 contract opened at 22,045 yuan/mt. Early in the session, bulls increased their positions, and SHFE zinc fluctuated considerably around the daily average, with movements within less than 100 yuan. It finally closed up at 22,060 yuan/mt, an increase of 15 yuan/mt or 0.07%. Trading volume decreased to 41,415 lots, while open interest rose by 5,157 lots to 115,000 lots. Overnight, SHFE zinc formed a bullish candlestick with a long upper shadow. Macro sentiment remained bearish, but slight domestic destocking provided some support for SHFE zinc. Expectations of a domestic surplus persist, with attention on the opening of the export window. SHFE zinc is expected to fluctuate mainly today.