Fundamentals Continue to Weigh on SHFE Zinc, Maintain Fluctuating Trend [SMM Zinc Morning Comment]

SMM September 23:

Overnight, the LME zinc contract opened at $2,895.5/mt. After opening, it gradually fluctuated upward, reaching a high of $2,934/mt during the night session. It then pulled back sharply from the high, touched a low of $2,888.5/mt near the end of the session, and edged up slightly before finally closing at $2,900/mt, up $1.5/mt or 0.05%. Trading volume increased by 938 lots to 10,805 lots, while open interest decreased by 1,477 lots to 216,000 lots. Overnight, LME zinc formed a bullish candlestick, supported by the 20-day moving average. The market continued to digest speeches from US Fed officials, and the US dollar index weakened slightly. Additionally, the destocking trend in LME zinc inventory persisted, with the 0-3 backwardation structure widening to $50.91/mt. With high capital concentration, the decline in LME zinc temporarily halted.

Overnight, the most-traded SHFE zinc 2511 contract opened at 22,080 yuan/mt. It reached a high of 22,095 yuan/mt early in the session, then fluctuated downward below the daily moving average, touched a low of 21,985 yuan/mt during the session, and edged up slightly before finally closing at 22,035 yuan/mt, down 55 yuan/mt or 0.25%. Trading volume decreased to 42,394 lots, while open interest increased by 320 lots to 131,000 lots. Overnight, SHFE zinc formed a bearish candlestick, pressured by the 10-day moving average. Domestic zinc ingot inventory decreased slightly before the National Day holiday, but smelters remained active in production driven by profits. Although there was stocking demand, overall orders remained weak during the underperforming peak season. Zinc prices continued to be under pressure and are expected to maintain a fluctuating trend.