China's Inventory Continues to Decline, SHFE Zinc Maintains Fluctuating Trend [SMM Morning Comment]

Published: Jul 3, 2026 08:51

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[SMM zinc morning comment] Overnight, the most-traded SHFE zinc 2608 contract opened at 24,130 yuan/mt. At the beginning of the session, bears cut positions, causing the price to consolidate and strengthen, touching a high of 24,250 yuan/mt. Then, bulls cut positions, prompting SHFE zinc to pull back to a low of 24,105 yuan/mt. Subsequently, bulls added positions, lifting SHFE zinc gradually above the daily average price line. It finally settled higher at 24,210 yuan/mt, up 80 yuan/mt or 0.33%.

Overnight LME zinc opened at $3,487.5/mt. In early trading, prices moved sideways around the daily average line, reaching a high of $3,503.5/mt during the session. LME zinc then gradually pulled back, touching a low of $3,432.5/mt. Entering the European trading session, prices consolidated and recovered, with the center gradually lifting back above the daily average line. In late trading, it edged down again, finally closing down at $3,472.5/mt, down $19.5/mt or 0.56%. Trading volume decreased to 79,557 lots, while open interest increased by 2,252 lots to 268,000 lots. Overnight LME zinc recorded a bearish candlestick with a long lower shadow. The 20-day and 40-day moving averages above exerted pressure on it, while the lower Bollinger Band below provided support. US June nonfarm payrolls added far fewer jobs than expected, and the market adjusted expectations for Fed policy. The US dollar index moved lower, and LME zinc rebounded from lows during the session.

Overnight, the most-traded SHFE zinc 2608 contract opened at 24,130 yuan/mt. In early trading, bears reduced positions, prices consolidated and strengthened, hitting a high of 24,250 yuan/mt. Then bulls reduced positions, SHFE zinc pulled back and touched a low of 24,105 yuan/mt. Afterwards, bulls added positions, and SHFE zinc gradually moved above the daily average line before finally closing up at 24,210 yuan/mt, up 80 yuan/mt or 0.33%. Trading volume decreased to 49,027 lots, and open interest decreased by 1,114 lots to 92,556 lots. Overnight SHFE zinc recorded a small bullish candlestick. Various moving averages above exerted pressure on it, while the lower Bollinger Band below provided support. End-use consumption was sluggish. Although inventories in China continued to decline, the overall level remained high, and TCs stayed low, SHFE zinc maintained a consolidation pattern.

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Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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