Domestic Zinc Ingot Inventory Buildup Continues, SHFE Zinc Maintains Fluctuating Trend [SMM Zinc Morning Comment]

SMM January 20:

Overnight, LME zinc opened at $3,224/mt. It initially touched a high of $3,240/mt, then fluctuated downward along the daily average line. After hitting a low of $3,195/mt, it rebounded above the daily average line, finally closing up at $3,234/mt, up $25/mt, a gain of 0.78%. Trading volume decreased to 7,750 lots, while open interest increased by 1,497 lots to 234,000 lots. Overnight, LME zinc formed a bullish candlestick, with the 5-day moving average providing resistance. Trump's threat to impose additional tariffs on Europe, a softer US dollar index, and China's 5% GDP growth in 2025 compared to the previous year, along with supportive economic data, temporarily halted the decline in zinc prices, maintaining a fluctuating trend.

Overnight, the most-traded SHFE zinc 2603 contract opened at 24,370 yuan/mt. After opening, it fluctuated along the daily average line, touching a high of 24,500 yuan/mt during the session and a low of 24,335 yuan/mt early in the session. It finally closed down at 24,440 yuan/mt, down 10 yuan/mt, a decline of 0.04%. Trading volume decreased to 59,628 lots, while open interest decreased by 240 lots to 128,000 lots. Overnight, SHFE zinc formed a bullish candlestick, with the middle Bollinger Band providing support. Recently, downstream orders have been weak due to the off-season, with some downstream users already starting holidays. Domestic zinc ingot inventory continued to build, providing insufficient fundamental support for zinc prices. However, supported by LME zinc prices, SHFE zinc is expected to maintain a fluctuating trend in the short term.

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