SHFE Zinc Stops Rising and Starts to Fall, Range-Bound Trading Expected [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,102/mt. In early trading, it moved sideways around the daily average line. Approaching European trading hours, it touched a high of $3,146.5/mt, but then bears sold at highs, pushing it below the daily average line. It finally closed down at $3,084/mt, falling by $2.5/mt, a decline of 0.08%. Trading volume increased to 13,418 lots, and open interest rose by 1,079 lots to 228,000 lots. Overnight, LME zinc formed a bearish candlestick with a long upper shadow, with various moving averages below providing support. After the Christmas holiday, LME zinc performed relatively stable compared to other metals, with no prominent supply-demand imbalance for the time being, mainly following macro trends. Funds briefly pushed prices higher during the session before pulling back, maintaining overall sideways movement.

Overnight, the most-traded SHFE zinc 2602 contract opened at 23,180 yuan/mt. In early trading, it quickly touched a high of 23,325 yuan/mt, but then bulls took profits and exited, causing the price center to shift below the daily average line. It finally closed down at 23,170 yuan/mt, falling by 55 yuan/mt, a decline of 0.24%. Trading volume decreased to 78,086 lots, and open interest fell by 331 lots to 93,356 lots. Overnight, SHFE zinc formed a bearish candlestick, with the KDJ indicator's gap narrowing. Social inventory declined again, but the TC decline narrowed, leaving limited downside room. Consumption also showed no highlights, so zinc prices are expected to mainly move within a range.

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