Fundamentals show both bullish and bearish factors, SHFE zinc continues to consolidate [SMM zinc morning comment]

SMM, September 16:

Overnight, LME zinc opened at $3,798.5/mt. After the open, LME zinc consolidated around the daily average line. In the afternoon session, LME zinc drifted lower, dipping to a low of $3,734/mt during the session, then rebounded all the way, touching a high of $3,835/mt near the close, and finally settled up at $3,831.5/mt, up $27/mt, or 0.71%. Trading volume decreased to 18,052 lots, and open interest rose by 2,411 lots to 267,000 lots. Overnight, LME zinc posted a bullish candlestick, with the upper Bollinger Band acting as resistance. Market risk-off sentiment persisted, and the high US dollar index pressured zinc prices. In addition, as China's export shipments to delivery warehouses gradually became visible, LME zinc ingot inventory showed an accumulating trend. During the session, LME zinc pulled back to a near four-week low, and the overall center of LME zinc continued to shift lower. It is expected to maintain a fluctuating trend in the short term.

Overnight, the most-traded SHFE zinc 2611 contract opened at 26,220 yuan/mt. At the beginning of the session, SHFE zinc touched a high of 26,290 yuan/mt, then drifted lower all the way after the open, dipping to a low of 26,025 yuan/mt during the session, and subsequently rebounded from lows to near the daily average line. It finally settled up at 26,170 yuan/mt, up 25 yuan/mt, or 0.1%. Trading volume increased to 56,441 lots, and open interest rose by 907 lots to 124,000 lots. Overnight, SHFE zinc posted a bearish candlestick, with the lower Bollinger Band providing support. Recently, the domestic ore shortage has persisted, and smelters' production enthusiasm has weakened. However, downstream consumption has not yet shown a trend improvement. With both bullish and bearish fundamentals present, SHFE zinc is expected to continue consolidating at lows in the short term.

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