Macro Sentiment Weakens, SHFE Zinc Center Declines [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,581.5/mt. In early trading, a tug-of-war between longs and shorts kept LME zinc consolidating at highs. During the European session, bulls entered the market, pushing LME zinc up to touch an intraday high of $3,600/mt. Subsequently, bears added positions, causing LME zinc to fall rapidly to an intraday low of $3,553.5/mt, before it consolidated and eventually closed down at $3,571/mt, a decline of $8/mt, or 0.22%. Trading volume decreased to 11,201 lots, while open interest rose by 1,200 lots to 271,000 lots. Overnight, LME zinc formed a small bearish candlestick. After the US Treasury revoked waivers that allowed sanctioned Iranian oil sales, market concerns that high energy prices would prompt the US Fed to raise interest rates strengthened the US dollar, putting LME zinc under pressure and causing it to fall. It is expected to mainly consolidate today.

Overnight, the most-traded SHFE zinc 2608 contract opened at 24,700 yuan/mt. In early trading, SHFE zinc fell rapidly to an intraday low of 24,645 yuan/mt, before bulls entered and pushed the price up to an intraday high of 24,775 yuan/mt. Subsequently, as bulls took profits, SHFE zinc's price center declined, eventually closing down at 24,695 yuan/mt, a decrease of 45 yuan/mt, or a drop of 0.18%. Trading volume fell to 39,292 lots, and open interest decreased by 1,616 lots to 87,863 lots. Overnight, SHFE zinc recorded a small bearish candlestick. Macro sentiment turned bearish, and the domestic pattern of tight mine supply and ample smelter production remained unchanged, while domestic consumption continued to be weak, causing SHFE zinc's price center to edge slightly lower. It is expected that SHFE zinc will consolidate today.

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