Affected by the decline in LME, SHFE zinc opened lower with a gap [SMM Zinc Morning Comment]

SMM January 21:

Overnight, the LME zinc contract opened at $3,226/mt. After opening, it fluctuated downward throughout the session. It touched a high of $3,237/mt early in the session and a low of $3,171/mt near the end, finally closing down at $3,175/mt, a decrease of $59/mt, or 1.82%. Trading volume increased to 11,487 lots, while open interest decreased by 1,676 lots to 232,000 lots. Overnight, LME zinc formed a bearish candlestick, finding support below the 20-day moving average. As macro news was gradually digested, nonferrous metals fell broadly. Coupled with a continued increase in LME zinc ingot inventory, fundamentals provided insufficient support for zinc prices. Bulls reduced their positions, leading to a slight decline in LME zinc.

Overnight, the most-traded SHFE zinc 2603 contract opened at 24,300 yuan/mt. It touched a high of 24,300 yuan/mt early in the session, then quickly fell to near the daily average line, subsequently fluctuating rangebound around it. During the session, it touched a low of 24,075 yuan/mt, finally closing down at 24,165 yuan/mt, a decrease of 245 yuan/mt, or 1%. Trading volume decreased to 74,321 lots, while open interest decreased by 2,353 lots to 124,000 lots. Overnight, SHFE zinc formed a bearish candlestick, facing resistance above the 5-day moving average. Influenced by the decline in overseas markets, SHFE zinc opened lower with a gap in the night session. On the fundamentals side, the weak supply-demand situation for zinc persists, leading to a slight weakening in SHFE zinc as well. It is expected to maintain a fluctuating trend in the short term.

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