Zinc on the SHFE edged down slightly during the night session, with limited downside room expected [SMM Zinc Morning Comment]

SMM December 23 News:

Overnight, the LME zinc contract opened at $3,083.5/mt. After opening, it fluctuated upward to a high of $3,101/mt, then continuously pulled back from the highs. During the night session, it touched a low of $3,064/mt before rising again near the daily average line, finally closing flat at $3,078/mt. Trading volume decreased to 7,997 lots, while open interest increased by 1,627 lots to 229,000 lots. Overnight, LME zinc formed a bearish candlestick, with support from the lower Bollinger Band. The US dollar index retreated from highs, but LME zinc ingot inventory remained high, and the LME zinc 0-3 Contango structure persisted. LME zinc overall rose first then fell, and is expected to maintain a fluctuating trend in the short term.

Overnight, the most-traded SHFE zinc 2602 contract opened at 23,030 yuan/mt. At the start of the session, it briefly rose to a high of 23,065 yuan/mt, then its center briefly declined to a low of 22,955 yuan/mt, before fluctuating rangebound around the daily average line. It finally closed down at 23,025 yuan/mt, falling 90 yuan/mt, a decrease of 0.39%. Trading volume decreased to 56,488 lots, while open interest increased by 3,183 lots to 93,795 lots. Overnight, SHFE zinc formed a bearish candlestick, with resistance from the 5-day moving average above. Downstream consumption performance was poor towards year-end, and the zinc ingot export window remained closed. SMM zinc ingot social inventory showed a slight increase on Monday. During the night session, the center of SHFE zinc shifted slightly lower, but support remains from the supply side, and downside room for SHFE zinc is expected to be limited.

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