Macro sentiment weakens, SHFE zinc edges down [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,566/mt, drifted higher initially to hit a session high of $3,584/mt, before bears added positions, sending LME zinc drifting lower. It touched a low of $3,512/mt during the night session, then consolidated and ultimately closed down at $3,528/mt, a decline of $43/mt or 1.2%. Trading volume fell to 11,044 lots, while open interest increased by 1,555 lots to 272,000 lots. Overnight LME zinc formed a large bearish candlestick. Trump stated that the ceasefire with Iran has ended, raising concerns that a resumption of war could push inflation higher again and lift interest rates. Macro sentiment weakened, and LME zinc declined. It is expected to mainly consolidate today.

Overnight, the most-traded SHFE zinc 2608 contract opened at 24,540 yuan/mt, consolidated initially and hit a high of 24,635 yuan/mt, then bulls reduced positions as it slipped, touching a low of 24,465 yuan/mt, before closing down at 24,535 yuan/mt, a drop of 130 yuan/mt or 0.53%. Trading volume decreased to 44,622 lots, and open interest fell by 3,383 lots to 82,293 lots. Overnight SHFE zinc recorded a small bearish candlestick. Macro sentiment turned bearish. China's ore tightness and metal surplus pattern remained unchanged, but domestic consumption stayed weak throughout. Amid a supply-demand reduction, SHFE zinc's center edged slightly lower. It is expected to consolidate today.

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