Overseas Macro Recovery Emerges, SHFE Zinc Opens Higher with a Gap [SMM Zinc Morning Comment]

SMM November 11 News:

       Overnight, LME zinc opened at $3,061.50/mt. After opening, LME zinc's center rose continuously, touching a high of $3,105.00/mt. Entering the night session, LME zinc fell below the daily average line, probing a low of $3,061.50/mt. Towards the end of the session, LME zinc recovered some losses, rising to hover near the daily average line, finally closing up at $3,085.50/mt, up $19/mt, a gain of 0.62%. Trading volume increased to 107,000 lots, while open interest decreased by 750 lots to 221,000 lots. On November 10, LME zinc inventory remained unchanged at 34,900 mt. Overnight, LME zinc recorded a bullish candlestick, supported by the 20-day and 60-day daily average lines below. Senate Republican Leader Thune stated that he would ensure the government shutdown-related agreement passes the Senate this morning. Meanwhile, US House Speaker Johnson expected the House to reconvene early this week. Signals of the US government resuming operations boosted market sentiment, leading to a rise in LME zinc's center.

      Overnight, the most-traded SHFE zinc 2512 contract opened higher with a gap at 22,770 yuan/mt. At the beginning of the session, bears reduced positions, pushing SHFE zinc up to 22,810 yuan/mt. Subsequently, bulls reduced positions, causing SHFE zinc to fall below the daily average line. Then, a tug-of-war between longs and shorts ensued, with SHFE zinc fluctuating around 22,715 yuan/mt, probing a low of 22,695 yuan/mt during the period. It finally closed up at 22,720 yuan/mt, up 50 yuan/mt, a gain of 0.22%. Trading volume decreased to 44,694 lots, while open interest decreased by 1,784 lots to 109,000 lots. Overnight, SHFE zinc recorded three consecutive bearish candlesticks, supported by various daily average lines below. Driven by the external market, SHFE zinc opened higher with a gap. However, according to SMM data, as of November 10, the total SMM zinc ingot inventory across seven regions was 159,600 mt, a slight increase of 900 mt WoW. Coupled with mediocre domestic consumption performance, SHFE zinc lacked sufficient support to continue rising further. Subsequent domestic inventory performance warrants attention.