Under the situation where the domestic market outperforms the overseas market, LME zinc encounters resistance [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,046.5/mt. In early trading, it moved downward along the daily average line, hitting a low of $3,020.5/mt during European trading hours. Subsequently, as bears took profits and exited the market, LME zinc surged rapidly, reaching a high of $3,070/mt during the night session. By the close, the price center pulled back to consolidate near the daily average line, ultimately settling at $3,050/mt, up $5.5/mt or 0.18%. Trading volume decreased to 8,918 lots, and open interest fell by 43 lots to 222,000 lots. Last Friday, LME zinc formed a small bullish candlestick, encountering resistance from the 5-day moving average above while finding support from the 10-day moving average below. With the US dollar strengthening, the LME zinc price center edged lower. The LME Cash-3M backwardation structure retreated below $100/mt, indicating reduced structural risks, though LME zinc remained under pressure. Last Friday, SHFE zinc recorded a long upper shadow bullish candlestick, with support provided by various moving averages below.

Last Friday, the most-traded SHFE zinc 2512 contract opened at 22,425 yuan/mt. In early trading, after a brief dip, its price center shifted above the daily average line, reaching a high of 22,540 yuan/mt during the session. It finally settled at 22,455 yuan/mt, up 105 yuan/mt or 0.47%. Trading volume decreased to 64,816 lots, and open interest fell by 1,174 lots to 115,000 lots. Last Friday, domestic TCs declined again. Smelter production in November is expected to continue decreasing due to raw material constraints, coupled with export expectations, leading to tight supply conditions and providing strong support at the bottom for SHFE zinc.

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