End-User Consumption Lacks Highlights, SHFE Zinc Records a Bearish Candlestick [SMM Zinc Morning Comment]

SMM Oct. 16:

      Overnight, the LME zinc contract opened at $2,955/mt. At the beginning of the session, the price fluctuated downward to a low of $2,926.5/mt, then gradually rose to a high of $2,976/mt. Toward the end of the session, LME zinc pulled back again, finally closing down at $2,940.5/mt, down $13/mt, or 0.44%. Open interest decreased to 119,000 lots, while open interest increased by 4,285 lots to 224,000 lots. On Oct. 15, LME zinc inventory fell by 250 mt to 38,350 mt, down 0.65%. Overnight, LME zinc formed a bearish candlestick, with support from the 10-day and 60-day daily average moving averages. US Fed governors called for accelerating the pace of interest rate cuts, while regional geopolitical uncertainties persist. Coupled with support from low overseas inventory, LME zinc has relatively strong short-term support at the bottom.

       Overnight, the most-traded SHFE zinc 2511 contract opened at 22,065 yuan/mt. At the beginning of the session, SHFE zinc quickly rose to a high of 22,085 yuan/mt, then bears increased their positions, causing SHFE zinc to fall rapidly to a low of 21,925 yuan/mt. Subsequently, SHFE zinc attempted to rise above the daily average moving average but ultimately met resistance and pulled back. Toward the end of the session, the price center fluctuated rangebound around 21,950 yuan/mt, finally closing down at 21,945 yuan/mt, down 70 yuan/mt, or 0.32%. Trading volume decreased to 82,699 lots, while open interest increased by 97 lots to 90,009 lots. Overnight, SHFE zinc formed a bearish candlestick, with resistance from the middle Bollinger Band and support from the lower Bollinger Band. Currently, zinc end-use consumption lacks bright spots, and recent market conditions show no signs of large-scale exports. Supply remains strong while demand is weak, yet LME zinc still provides some support to SHFE zinc. SHFE zinc is expected to fluctuate rangebound in the short term.