LME Drags SHFE Zinc Lower [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,804.0/mt. In early trading, LME zinc drifted higher, touching a high of $3,873.5/mt, before plunging sharply near the close to a low of $3,773.5/mt, ultimately settling down at $3,780.5/mt, down $21.0/mt, or 0.55%. Trading volume decreased to 13,211 lots, and open interest fell by 203 lots to 270,000 lots. Overnight, LME zinc formed a small bearish candlestick. Bearish factors from the US midterm elections were released, and the market remained cautious ahead of the nonfarm payrolls report. The LME zinc price center shifted lower. LME zinc is expected to consolidate today.

Overnight, the most-traded SHFE zinc 2612 contract opened at 25,800 yuan/mt. In early trading, it shot up to a high of 25,920 yuan/mt, then drifted lower to a low of 25,365 yuan/mt, ultimately settling down at 25,455 yuan/mt, down 345 yuan/mt, or 1.34%. Trading volume decreased to 98,569 lots, and open interest fell by 294 lots to 100,000 lots. Overnight, SHFE zinc formed a large bearish candlestick. Macro sentiment fluctuated, and expectations for subsequent end-use demand weakened. Support for SHFE zinc diminished, and some bullish funds exited. SHFE zinc is expected to consolidate today.

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