Macro and Fundamentals Resonate, SHFE Zinc Hits New High Since August [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,064/mt. In early trading, it fluctuated upward along the daily average line. During European trading hours, it touched a high of $3,093.5/mt. Subsequently, bulls took profits and exited, causing LME zinc to fluctuate downward, with its center shifting down to around $3,060/mt, where it consolidated. It finally closed up at $3,062/mt, up $6.5/mt, a gain of 0.21%. Trading volume increased to 15,774 lots, and open interest increased by 1,894 lots to 223,000 lots. Overnight, LME zinc recorded a doji bearish candlestick, finding support at the middle Bollinger Band. Overnight, LME zinc maintained a fluctuating trend. Unexpectedly weak US ADP data strengthened expectations for a US Fed interest rate cut next week. Bulls primarily increased their positions, and LME zinc fluctuated at highs.

Overnight, the most-traded SHFE zinc 2601 contract opened lower with a gap at 22,710 yuan/mt. In early trading, it quickly probed a low of 22,650 yuan/mt. Subsequently, bears reduced positions and exited, causing SHFE zinc to rise rapidly. It generally traded above the daily average line and finally closed up at 22,850 yuan/mt, up 110 yuan/mt, a gain of 0.48%. Trading volume decreased to 81,790 lots, and open interest decreased by 337 lots to 104,000 lots. Overnight, SHFE zinc recorded a five-day winning streak. The center of the daily candlestick moved higher, facing resistance from the upper Bollinger Band. Overnight, macro and fundamental factors resonated, causing zinc prices to hold up well. Spot premiums also rose consistently, and SHFE zinc hit a new high since August this year.

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