SHFE Zinc Stops Rising and Starts to Fall, Weak Consumption Limits Rise Height [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,279/mt. Initially, it fluctuated around the daily average line, then rose with fluctuations driven by increased buying from bulls, reaching a high of $3,373/mt near the night session. During the night session, its center dipped slightly to $3,345/mt, and it finally closed up at $3,351/mt, gaining $82/mt, or 2.51%. Trading volume increased to 16,562 lots, and open interest rose by 1,044 lots to 231,000 lots. Overnight, LME zinc recorded a three-day winning streak, with the center of the daily candlestick moving higher and the MACD bullish candlestick expanding. The US dollar fell to a four-month low, providing support for nonferrous metals. Meanwhile, the severe winter caused a sharp rise in natural gas prices in Europe and the US, increasing overseas smelting costs. Subsequent attention will be on the production of overseas smelters, and zinc prices are expected to fluctuate at highs.

Overnight, the most-traded SHFE zinc 2603 contract opened higher with a gap at 25,280 yuan/mt. Initially, it moved slightly lower from the high to fluctuate around the daily average line, with an amplitude not exceeding 300 yuan/mt, and finally closed up at 25,100 yuan/mt, gaining 340 yuan/mt, or 1.37%. Trading volume decreased to 147,000 lots, while open interest increased by 1,456 lots to 123,000 lots. Overnight, SHFE zinc stopped rising and started to fall, but the center of the daily candlestick moved higher. Geopolitical instability persists, and gold and silver prices hit new highs, with favorable macro sentiment driving zinc prices to fluctuate at highs. However, weak consumption during the off-season limits the extent of the rise.

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