Insufficient Price Support Combined with LME Impact, SHFE Zinc Center Declined [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,246.5/mt. At the beginning of the session, LME zinc maintained a fluctuating trend, touching a high of $3,258.5/mt. Upon entering European trading hours, the price initiated a downward trend, continuously falling to a low of $3,153/mt. Although there was a slight rebound subsequently, it failed to reverse the decline. It finally closed down at $3,160/mt, down $85.5/mt, a decrease of 2.63%. The trading volume increased to 128,000 lots, and the open interest decreased by 1,964 lots to 234,000 lots. Overnight, LME zinc recorded a large bearish candlestick, with support provided by the 10-day and 60-day daily average moving averages below. Yesterday, the US dollar index fluctuated and moved higher, while the market gradually digested recent macro disturbances. Many bulls exited the market, leading LME zinc to end its five-day winning streak, with its price center moving lower.

Overnight, the most-traded SHFE zinc 2602 contract opened lower with a gap at 24,190 yuan/mt. At the beginning of the session, SHFE zinc surged to a high of 24,230 yuan/mt, after which the price began a downward trend, continuously falling to a low of 24,045 yuan/mt. Although there was a slight rebound subsequently, it failed to recover the losses. Towards the end of the session, it maintained a fluctuating trend at lows, finally closing down at 24,130 yuan/mt, down 200 yuan/mt, a decrease of 0.82%. The trading volume decreased to 62,977 lots, and the open interest decreased by 684 lots to 90,919 lots. Overnight, SHFE zinc recorded a bearish candlestick, with support provided by the middle Bollinger Band below. Recently, domestic end-use consumption has been mediocre, providing insufficient support for prices. Simultaneously, influenced by the decline in LME zinc, SHFE zinc also moved lower.

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