Fundamentals Provide Strong Support, SHFE Zinc Fluctuates at Highs [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,052.5/mt. At the beginning of the session, it briefly dipped to $3,040.5/mt before its center shifted above the daily average line. Approaching the night session, it touched a high of $3,476/mt. Toward the end of the session, bulls reduced their positions and exited the market, causing the center of LME zinc to move downward and consolidate around $3,050/mt. It finally closed down at $3,051/mt, down $3.5/mt or 0.11%. Trading volume decreased to 9,702 lots, and open interest fell by 3,057 lots to 226,000 lots. Overnight, LME zinc recorded three consecutive negative closes, with the center of the daily candlestick moving lower, finding support at the middle Bollinger Band. Overnight, US Fed officials expressed cautious remarks, indicating that sustained interest rate cuts still require further assessment. Coupled with increased expectations of LME inventory being shipped to delivery warehouses, bulls reduced their positions and exited, putting LME zinc under pressure.

Overnight, the most-traded SHFE zinc 2512 contract opened at 22,725 yuan/mt. At the beginning of the session, after briefly touching a high, bulls reduced their positions and exited, leading to a downward fluctuation throughout the session. The center operated below the daily average line, and it finally closed up at 22,630 yuan/mt, up 35 yuan/mt or 0.15%. Trading volume decreased to 41,025 lots, and open interest fell by 28 lots to 113,000 lots. Overnight, SHFE zinc stopped rising and started to fall, encountering resistance at the upper Bollinger Band. Supported by export expectations, SMM social inventory recorded another decrease. Combined with expectations of further TC declines and strong support from the supply side, SHFE zinc fluctuated at highs.

Data Source Statement: Except for publicly available information, other data are processed by SMM based on public information, market communication, and SMM's internal database model. They are for reference only and do not constitute decision-making advice.