Domestic TC Continues to Decline, Providing Support for SHFE Zinc [SMM Zinc Morning Comment]

SMM October 22:

    Overnight, the LME zinc contract opened at $2,975.5/mt. At the beginning of the session, it briefly touched a low of $2,973/mt, then fluctuated upward as bulls increased their positions, reaching a high of $3,008/mt during the night session. However, due to insufficient upward momentum, it fluctuated downward and finally closed up at $2,993.5/mt, up $17.5/mt or 0.95%. The trading volume increased to 12,000 lots, and open interest rose by 12,754 lots to 224,000 lots. Overnight, LME zinc recorded a small bullish candlestick, testing the 5/10-day daily average lines. LME zinc continued to maintain low inventory, with risks remaining, while macro sentiment remained relatively optimistic. The price center of LME zinc rose, and it is expected to fluctuate today.

   Overnight, the most-traded SHFE zinc 2512 contract opened at 22,010 yuan/mt. At the beginning of the session, bulls increased their positions, pushing SHFE zinc up to a high of 22,030 yuan/mt, after which it fluctuated downward and touched a low of 21,930 yuan/mt. It finally closed up at 21,980 yuan/mt, up 10 yuan/mt or 0.05%. The trading volume decreased to 51,403 lots, and open interest increased by 1,901 lots to 132,000 lots. Overnight, SHFE zinc recorded a small bearish candlestick, with the 10/20-day daily average lines forming resistance. Overseas low inventory and continuously declining domestic TC have consistently supported zinc prices, but after the export window opened, domestic zinc ingot exports remained relatively limited, making it difficult to change the oversupply situation. SHFE zinc is expected to fluctuate today.