Supply Side Supports SHFE Zinc Rise, Overnight Price Center Edges Up [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,485/mt. In early trading, LME zinc moved sideways around the daily average, then edged down and pulled back to $3,466.5/mt. Afterwards, the price rose steadily, touching a high of $3,558/mt during the session. In late trading, gains narrowed slightly and the price consolidated at highs, eventually closing up at $3,551.5/mt, up $64.5/mt, or 1.85%. Trading volume rose to 111,000 lots, while open interest increased by 1,117 lots to 263,000 lots. Overnight, LME zinc formed a large bullish candlestick. The lower Bollinger Band provided support. The US dollar index rose first then fell, while inventories outside China continued to decline, supporting LME zinc's price center to edge up.

Overnight, the most-traded SHFE zinc 2608 contract opened at 24,460 yuan/mt. In early trading, the price edged up slightly but subsequently drifted lower and found a low at 24,420 yuan/mt. Subsequently, bulls added positions, driving the price up to a high of 24,620 yuan/mt. In the late session, bulls reduced positions and momentum faded. It eventually closed up at 24,585 yuan/mt, up 235 yuan/mt, or 0.97%. Trading volume fell to 59,930 lots, while open interest increased by 3,478 lots to 98,932 lots. Overnight, SHFE zinc formed a bullish candlestick. The lower Bollinger Band provided support, while the middle band provided resistance. Currently, domestic TCs are low, and China's zinc ingot production in July is expected to continue to decline, supporting SHFE zinc to rise. However, end-use consumption limited the upside.

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