Capital Enthusiasm Persists, Zinc Prices Fluctuate at Highs [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,370/mt. In early trading, it fluctuated near the daily average line before its price center edged up slightly. During European trading hours, it touched a high of $3,429/mt. Entering the night session, the price center gradually moved lower, ultimately closing up at $3,375.5/mt, an increase of $17/mt or 0.51%. Trading volume increased to 14,032 lots, while open interest decreased by 1,107 lots to 233,000 lots. Overnight, LME zinc recorded a five-day winning streak, with the center of the daily candlestick moving higher. Due to escalating tensions in Iran, gold prices hit new highs again, and aluminum and zinc prices rose significantly. As the US Fed kept interest rates unchanged, the US dollar index rebounded, causing the gains to narrow. Market participants are monitoring geopolitical risks.

Overnight, the most-traded SHFE zinc 2603 contract opened at 25,450 yuan/mt. In early trading, it followed the daily average line lower, probing a low of 25,260 yuan/mt before its price center moved higher to touch a high of 25,515 yuan/mt. Subsequently, the price center moved lower again, ultimately closing up at 25,320 yuan/mt, an increase of 105 yuan/mt or 0.42%. Trading volume decreased to 108,000 lots, while open interest decreased by 2,429 lots to 116,000 lots. Overnight, SHFE zinc recorded a small bearish candlestick, with the KDJ indicator's opening narrowing. Increased geopolitical uncertainty overnight led to SHFE zinc primarily fluctuating at highs. The SHFE raised the price limit fluctuation margin to 9%, and the margin ratio was also raised to 10% and 11%. With high speculative interest, zinc prices are unlikely to see a significant correction in the short term.

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