Insufficient fundamental support, SHFE zinc center moves lower [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,162.5/mt. At the beginning of the session, the price center rose, touching a high of $3,186/mt, then continued to decline, probing a low of $3,123/mt, and finally closed down at $3,131/mt, down $29/mt, a decrease of 0.92%. Trading volume increased to 131,708 lots, while open interest decreased by 1,208 lots to 232,790 lots. Overnight, LME zinc recorded a bearish candlestick, with the upper Bollinger Band exerting pressure above, while the 20-day and 60-day daily averages provided support below. Although some US Fed officials recently sounded relatively dovish, increased overseas zinc inventory combined with a continuous rise in the US dollar index led to a lower price center for LME zinc.

Overnight, the most-traded SHFE zinc 2602 contract opened at 23,960 yuan/mt. At the beginning of the session, the price briefly surged, touching a high of 23,990 yuan/mt, then longs reduced their positions, pushing the price down to probe a low of 23,750 yuan/mt. During the session, bears reduced their positions, leading to a slight rebound in SHFE zinc. It finally closed down at 23,800 yuan/mt, down 175 yuan/mt, a decrease of 0.73%. Trading volume decreased to 61,828 lots, while open interest decreased by 3,928 lots to 79,858 lots. Overnight, SHFE zinc recorded a bearish candlestick, with the upper Bollinger Band exerting pressure above. After the holiday, domestic social inventory continued to increase, market consumption performance was average, spot transactions were mostly for rigid demand, and fundamentals provided insufficient support for zinc prices, leading to a lower price center for SHFE zinc.

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