Off-Season Consumption Drags Down SHFE Zinc Trend [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $3,574.5/mt. After briefly touching a high of $3,583/mt in early trading, bulls took profits and exited, and LME zinc moved down along below the daily moving average, hitting a low of $3,500.5/mt during the night session. Near the end of the session, its center shifted up near the daily moving average, and it finally closed down at $3,528/mt, down $53/mt, or 1.48%. Trading volume increased to 13,664 lots, while open interest decreased by 622 lots to 254,000 lots. Last Friday, LME zinc recorded a bearish candlestick with a long lower shadow; the 60-day moving average below provided support, and the MACD turned bearish. The US dollar strengthened last Friday, causing LME zinc bulls to exit and the market to be in the doldrums overall. Attention should be paid to the geopolitical situation in the Middle East going forward.

Last Friday, the most-traded SHFE zinc 2609 contract opened at 24,370 yuan/mt. After a brief rally in early trading, bears added positions and pushed SHFE zinc down, drifting lower to touch a low of 24,235 yuan/mt. Then bears reduced positions and exited, and SHFE zinc drifted higher, with its center running above the daily moving average. It finally closed down at 24,400 yuan/mt, down 210 yuan/mt, or 0.85%. Trading volume decreased to 62,739 lots, while open interest increased by 888 lots to 96,298 lots. Last Friday, SHFE zinc turned positive after a losing streak, yet the daily candlestick's center moved lower. Last Friday, SHFE zinc was in the doldrums. In the off-season, downstream enterprises were reluctant to accept high zinc prices, putting the SHFE zinc center under pressure.

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