SHFE Zinc Records Six Consecutive Gains, Breaking Through the 23,000 yuan/mt Key Resistance Level [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,060/mt. In early trading, it fluctuated around the daily average line. During the European session, its center shifted below the daily average line, touching a low of $3,038.5/mt. Subsequently, as bears reduced positions and exited, LME zinc rose all the way, reaching a high of $3,102.5/mt during the night session, and finally settled up at $3,085/mt, an increase of $23/mt or 0.75%. Trading volume decreased to 13,233 lots, and open interest decreased by 810 lots to 222,000 lots. Overnight, LME zinc formed a bullish candlestick, with the upper Bollinger Band providing resistance and the middle Bollinger Band offering support. Although LME inventory increased overnight, it remained at relatively low levels. The LME Cash-3M backwardation structure remained high at $150/mt, indicating persistent structural risks, and LME zinc is expected to fluctuate at highs.

Overnight, the most-traded SHFE zinc 2601 contract opened at 22,835 yuan/mt. During the session, SHFE zinc fluctuated upward along the daily average line, reaching a high of 23,095 yuan/mt towards the close, and finally settled up at 23,010 yuan/mt, an increase of 170 yuan/mt or 0.74%. Trading volume decreased to 70,416 lots, while open interest increased by 899 lots to 107,000 lots. Overnight, SHFE zinc recorded six consecutive bullish candlesticks, breaking above the key 23,000 yuan/mt resistance level. Currently, the fundamentals show a weak supply-demand situation, providing upward momentum for zinc prices. However, the upside potential should not be overestimated, and cautious operation is advised.

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, and are for reference only, not constituting decision-making advice.