Bulls exit hedging, SHFE zinc records three consecutive losses [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,762.5/mt, briefly shooting up to a session high of $3,767/mt. Entering European trading hours, bears added positions to pressure prices, and LME zinc drifted lower, with losses gradually widening. During the night session, bears continued to gain momentum, accelerating the decline to an intraday low of $3,689/mt. Prices rebounded slightly near the close, ultimately settling down at $3,695/mt, a drop of $63/mt, or 1.68%. Trading volume increased to 13,607 lots, and open interest rose by 2,753 lots to 261,000 lots. Overnight, LME zinc formed a large bearish candlestick, with the daily candlestick's center shifting significantly lower, breaking below multiple moving average supports, and the KDJ indicator gap widened downward. Overnight, bearish capital entered the market to pressure prices, sending LME zinc tumbling all the way. Today marks the LME delivery day, with attention on the actual volume delivered to warehouses.

Overnight, the most-traded SHFE zinc 2610 contract opened at 25,690 yuan/mt. At the open, bulls taking profits and exiting sent SHFE zinc diving. It then consolidated and pulled back throughout the session to probe a low of 25,380 yuan/mt. Prices rebounded slightly near the close, finally settling down at 25,425 yuan/mt, a decline of 275 yuan/mt, or 1.07%. Trading volume decreased to 88,975 lots, and open interest fell by 3,169 lots to 149,000 lots. Overnight, SHFE zinc recorded a large bearish candlestick with no upper shadow, with the daily candlestick's center moving lower, finding support from the 20-day moving average below. Amid the off-season consumption backdrop and coinciding with a delivery cycle in China and on the LME, bullish capital retreated to avoid risk, causing zinc prices to retreat from highs. Attention is on inventory changes.

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