Zinc Prices Consolidate at High Levels, Focus on LME Inventory Changes [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,073.5/mt. In early trading, it fluctuated around the daily average line. During European trading hours, it touched a high of $3,094/mt, but then bears sold at highs, pushing the price center down to around $3,050/mt, and it finally closed down at $3,054.5/mt, down $23/mt or 0.75%. Trading volume decreased to 13,870 lots, while open interest increased by 1,503 lots to 229,000 lots. Overnight, LME zinc formed a bearish candlestick, with the daily candlestick's center moving lower. As economic data alleviated concerns about the US economy and labour market, expectations for a US Fed interest rate cut increased, the US dollar fluctuated at highs, and expectations for LME deliveries rose, bears entered the market to sell, pushing the LME zinc price center lower.

Overnight, the most-traded SHFE zinc 2512 contract opened at 22,605 yuan/mt. In early trading, it quickly touched a high of 22,640 yuan/mt, then its center fluctuated around the daily average line, finally closing down at 22,605 yuan/mt, down 5 yuan/mt or 0.02%. Trading volume decreased to 47,267 lots, while open interest increased by 999 lots to 113,000 lots. Overnight, SHFE zinc formed a doji, with the MACD bullish candlestick narrowing. Overnight, SHFE zinc consolidated at high levels, supported by low LME inventory and tight domestic supply; zinc prices are temporarily not suitable for short positions. Attention should be paid to domestic exports and overseas deliveries.

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