High Zinc Ingot Inventory Persisted, SHFE Zinc Remained in the Doldrums [SMM Zinc Morning Comment]

SMM News, March 23:

Last Friday, LME zinc opened at $3,089.5/mt. After the opening, LME zinc fluctuated at highs and touched a high of $3,114.5/mt during the session, then fluctuated downward all the way. Near the close, LME zinc dipped to a low of $3,039/mt, then rebounded slightly and finally closed down at $3,056/mt, down $17.5/mt, or 0.57%. Trading volume decreased to 11,568 lots, and open interest fell by 2,671 lots to 206,000 lots. Last Friday, LME zinc posted a bearish candlestick, with the lower Bollinger Bands forming resistance. Market concerns over an escalation in the Middle East situation and the stronger US dollar index weighed on base metals, and LME zinc remained under pressure and continued to decline. It is expected to remain at lows in the short term.

Last Friday, the most-traded SHFE zinc 2605 contract opened at 23,000 yuan/mt. In early trading, SHFE zinc touched a high of 23,015 yuan/mt, then fluctuated downward and traded below the daily average line. After hitting an intraday low of 22,715 yuan/mt, it then fluctuated upward back above the daily average line and finally closed down at 22,860 yuan/mt, down 75 yuan/mt, or 0.33%. Trading volume decreased to 55,725 lots, and open interest fell by 751 lots to 105,000 lots. Last Friday, SHFE zinc posted a bearish candlestick, with the lower Bollinger Bands providing support. Although the earlier decline in zinc prices drove some destocking of zinc ingot inventory, overall inventory remained at highs. Coupled with macro pressure on base metals, SHFE zinc prices remained in the doldrums.

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