SMM Morning Comment For Zinc Market On August 1

SHANGHAI, Aug 1 (SMM) –China's manufacturing PMI was 49.3% in July, an increase of 0.3 percentage points from the previous month. China’s non-manufacturing business activity index and the composite PMI output index were 51.5% and 51.1% respectively in July, both in the expansion territory for seven consecutive months. China’s National Development and Reform Commission issued a notice on measures to restore and expand consumption. China’s State Council held a meeting, proposing to roll out policy measures that are conducive to the stable and healthy development of the real estate market according to different needs. The monthly CPI rate in the euro zone recorded -0.1% in July, the largest drop since January 2023. Inflation in the euro zone fell further in July, which may push the European Central Bank not to raise interest rates at least at its next meeting. LME zinc price movement was volatile on Monday, with its opening price at $2,506.5/mt, low and high at $2,487/mt and $2,578/mt before closing up 3.29% at $2,575/mt. Trading volume rose to 12,572 lots, and open interest rose 3,855 lots to 202,000 lots. LME zinc found support at the 5-day moving average. LME zinc inventory increased by 525 mt to 99,675 mt. Inflation in the euro zone fell further in July, thus the market showed an optimistic atmosphere, boosting LME zinc price. Overnight, the most-traded SHFE 2309 zinc contract opened at 21,090 yuan/mt, with its low and high at 21,035 yuan/mt and 21,245 yuan/mt before closing at 21,190 yuan/mt, up 1.85%. Trading volume fell to 105,000 lots, and open interest decreased by 272 lots to 118,000 lots. Economic stimulus policies in China shored up SHFE zinc.