Driven by LME, SHFE Zinc Opened Lower with a Gap [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,556.5/mt. Early in the session, LME zinc fluctuated upward to a high of $3,585/mt. As European trading began, bears increased positions and prices pulled back continuously from highs. Near the end of the session, it probed a low of $3,531.5/mt, ultimately closing lower at $3,543.5/mt, down $15.25/mt, a decline of 0.43%. Trading volume increased to 108,000 lots, and open interest increased by 2,300 lots to 230,000 lots. On May 29, LME zinc inventory increased by 5,475 mt to 113,800 mt, up 5.05%. Overnight, LME zinc posted a small bearish candlestick, with the upper Bollinger Bands rail exerting pressure above and the 40/60-day moving averages providing support below. Driven by ongoing progress in US-Iran negotiations, market optimism strengthened, but ex-China social inventory saw a notable increase, and LME zinc rose first then fell, hovering at highs.

Overnight, the most-traded SHFE zinc 2607 contract opened lower with a gap at 24,880 yuan/mt. Early in the session, SHFE zinc briefly touched a high of 24,885 yuan/mt, after which bulls reduced positions and prices quickly declined. Near the end of the session, it probed a low of 24,630 yuan/mt, ultimately closing lower at 24,665 yuan/mt, down 300 yuan/mt, a decline of 1.20%. Trading volume decreased to 67,517 lots, and open interest slightly decreased by 128 lots to 109,000 lots. Overnight, SHFE zinc posted a bearish candlestick, with the upper Bollinger Bands rail exerting pressure above and the middle Bollinger Bands rail providing support below. Dragged down by LME, SHFE zinc moved lower. Currently, ore supply remains persistently tight, and smelter production is expected to decline further going forward. However, China's consumption has entered the off-season, with bullish and bearish sentiment intertwined in the market, and upward momentum faces pressure.

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