Weakening Macro Sentiment, SHFE Zinc Declines [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,439/mt, fluctuated upward in early trading and touched $3,457/mt during European trading hours. Subsequently, bears increased their positions, and LME zinc fluctuated downward all the way, hitting a low of $3,418/mt during the night session, and finally closed down at $3,441/mt, a decrease of $6/mt or 0.17%. Trading volume increased to 10,480 lots, and open interest rose by 3,121 lots to 240,000 lots. Last Friday, LME zinc recorded a small bullish candlestick. The strong US non-farm payrolls data for April bolstered the US Fed's confidence in keeping interest rates unchanged. The US-Iran situation remained tense, putting base metals under pressure. Coupled with substantial shipments to LME delivery warehouses, the center of LME zinc continued to decline. LME zinc is expected to remain in the doldrums today.

Last Friday, the most-traded SHFE zinc 2606 contract opened at 24,205 yuan/mt. In early trading, bulls reduced their positions, and SHFE zinc fluctuated downward all the way, hitting a low of 24,025 yuan/mt at the end of the session, and finally closed down at 24,030 yuan/mt, a decrease of 245 yuan/mt or 1.01%. Trading volume decreased to 45,345 lots, and open interest fell by 4,530 lots to 85,273 lots. Last Friday, SHFE zinc recorded a large bearish candlestick. Macro sentiment weakened, base metals were under pressure, and SHFE zinc declined. However, domestic ore supply in China remained relatively tight, with zinc concentrate TCs falling to historical lows, providing support at the bottom for SHFE zinc. SHFE zinc is expected to remain in the doldrums today.

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