SHFE Zinc Opens Higher with a Gap, Focus on Subsequent Smelter Production Cuts [SMM Zinc Morning Comment]

SMM November 27 News:

Overnight, the LME zinc contract opened at $3,000.5/mt. At the beginning of the session, it dipped to a low of $2,998/mt, then rose steadily throughout the session, reaching a high of $3,058.5/mt near the close. It finally closed up at $3,055/mt, gaining $55.5/mt, an increase of 1.85%. Trading volume increased to 13,189 lots, and open interest rose by 1,623 lots to 221,000 lots. Overnight, LME zinc recorded a large bullish candlestick, supported by the 60-day moving average below. Expectations for a US Fed interest rate cut next month strengthened, the US dollar index continued to decline, and macro sentiment provided ongoing support, driving LME zinc prices higher.

Overnight, the most-traded SHFE zinc 2601 contract opened at 22,480 yuan/mt. After opening, it fluctuated rangebound around the daily average line, touching a low of 22,450 yuan/mt early in the session and a high of 22,530 yuan/mt near the close. It finally closed up at 22,525 yuan/mt, gaining 170 yuan/mt, an increase of 0.76%. Trading volume increased to 56,452 lots, and open interest rose by 750 lots to 101,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, supported by the 20-day moving average below. Boosted by the LME zinc performance, SHFE zinc opened higher with a gap in the night session. On the fundamentals side, persistent ore supply tightness continues to provide support, but consumption is currently in the off-season. Amid the tug-of-war between longs and shorts, SHFE zinc hovers at highs. Continued attention is needed on subsequent smelter production cuts.

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