Affected by Lower LME Prices, SHFE Zinc Recorded a Small Bearish Candlestick with a Long Upper Shadow [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,636/mt. At the beginning of the session, LME zinc oscillated around the daily moving average. As European trading hours began, bulls increased positions, and LME zinc rose to a high of $3,658/mt. Prices at night session continued to pull back, hitting a low of $3,593/mt. At the end of the session, prices stopped falling and rebounded, partially recovering lost ground, ultimately closing down at $3,603/mt, falling $27.5/mt or 0.76%. Trading volume decreased to 88,462 lots, and open interest increased by 3,764 lots to 231,000 lots. On June 3, LME zinc inventory decreased by 755 mt to 112,525 mt, a decline of 0.68%. Overnight, LME zinc recorded a bearish candlestick, with various moving averages providing support. The US-Iran negotiation deadlock boosted the US dollar's continued strengthening. Combined with US ADP employment data exceeding expectations, which fueled inflation concerns and weakened expectations for US Fed interest rate cuts this year, the stronger US dollar pressured zinc prices, and LME zinc's overall center shifted downward.

Overnight, the most-traded SHFE zinc 2607 contract opened at 25,100 yuan/mt. At the beginning of the session, SHFE zinc surged to test 25,280 yuan/mt before pulling back under pressure. It continued to weaken during the session, hitting a low of 25,005 yuan/mt. At the end of the session, prices rebounded slightly, recovering part of the losses, ultimately closing down at 25,070 yuan/mt, falling 80 yuan/mt or 0.32%. Trading volume decreased to 55,949 lots, and open interest decreased by 933 lots to 112,000 lots. Overnight, SHFE zinc recorded a small bearish candlestick with a long upper shadow, with various moving averages below providing support. The decline in LME prices dragged SHFE zinc's center downward. Currently, China's end-use consumption remains weak, and zinc prices lack sufficient bottom support. However, ore supply remains tight and macro uncertainties persist. SHFE zinc is expected to hold up well with a slightly strong oscillation in the short term.

Data source disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.