Zinc Ingot Inventory Continues to Decline, SHFE Zinc Center Rises [SMM Zinc Morning Comment]

SMM September 26:

Overnight, the LME zinc contract opened at $2,927/mt. At the beginning of the session, it fluctuated rangebound around the daily average line, touching a low of $2,913.5/mt, then rose all the way up. Entering the night session, LME zinc hit a high of $2,960/mt, then continuously pulled back from the high level, finally closing flat at $2,922.5/mt. Trading volume increased to 11,625 lots, and open interest rose by 1,804 lots to 217,000 lots. Overnight, LME zinc recorded a bearish candlestick, with support from the 5-day moving average below. The US Q2 GDP data was significantly revised upward, and the US dollar index rose sharply, suppressing zinc prices. However, strong support from low LME inventory kept LME zinc maintaining its high-level trend.

Overnight, the most-traded SHFE zinc 2511 contract opened at 22,045 yuan/mt. After opening, SHFE zinc continued to fluctuate rangebound around the daily average line, touching a low of 21,995 yuan/mt early in the session and a high of 22,085 yuan/mt during the session, finally closing up at 22,050 yuan/mt, up 5 yuan/mt, an increase of 0.02%. Trading volume decreased to 62,614 lots, and open interest fell by 1,322 lots to 129,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, with resistance from the 20-day moving average above. Influenced by pre-holiday downstream stocking demand, SMM zinc ingot inventory dropped to around 150,000 mt. Coupled with the boost from gains in the overseas market, the center of SHFE zinc continued to move upward during the night session. Zinc prices are expected to maintain a fluctuating trend.