Weakening Consumption Drags Down SHFE Zinc Price Center [SMM Zinc Morning Comment]

SMM December 12 News:

Overnight, LME zinc opened at $3,135.5/mt. At the beginning of the session, it briefly rose to a high of $3,165/mt, but then bears increased their positions, causing LME zinc to fluctuate downward and hit a low of $3,087.5/mt by the end of the session. It finally closed down at $3,095/mt, falling $44/mt, a decline of 1.40%. Trading volume dropped to 15,151 contracts, while open interest increased by 12,493 contracts to 236,000 contracts. Overnight, LME zinc recorded a large bearish candlestick. LME zinc inventory entered a phase of inventory buildup, easing market tension caused by low inventory. Korea Zinc will continue to expand its smelter, and the center of LME zinc shifted downward. LME zinc is expected to fluctuate today.

Overnight, the most-traded SHFE zinc 2601 contract opened at 23,310 yuan/mt. At the beginning of the session, it briefly rose to a high of 23,345 yuan/mt, then fluctuated and consolidated along the daily moving average, finally closing down at 23,215 yuan/mt, falling 215 yuan/mt, a decline of 0.92%. Trading volume dropped to 66,013 contracts, while open interest decreased by 1,147 contracts to 82,155 contracts. Overnight, SHFE zinc recorded a small bearish candlestick. The 5-day moving average formed resistance, while the 10-day moving average provided support. Macro optimism weakened. Fundamentally, northern regions entered another round of environmental protection alerts, and consumption weakened. Although the supply side still provided support, the center of SHFE zinc shifted downward. SHFE zinc is expected to fluctuate today.