SMM zinc market morning comment (Feb 22)

Overnight, LME zinc opened at $2,378/mt on Wednesday, and reached a high of $2,419/mt before dropping to $2,400/mt, and finally closed up $16.5/mt or 0.69% at $2,398.5/mt. Trading volume decreased to 8,935 lots. Open interests dipped by 4,476 lots to 240,000 lots. LME zinc prices saw suppression of the 20-day moving average and supports from the 10-day moving average. Overnight LME zinc stocks dropped by 300 mt or 0.11% to 269,100 mt. Overnight US dollar index dropped. Non-ferrous metal prices hiked. There was little likelihood of an early interest rate cut by the Federal Reserve. Therefore, upside in LME zinc prices was curbed.

The most-traded SHFE zinc contract opened at a low of 20,350 yuan/mt on Wednesday, and reached a high of 20,410 yuan/mt before hitting a low of 20,305 yuan/mt, and finally closed up 15 yuan/mt or 0.07% at 20,310 yuan/mt. Trading volume decreased to 42,675 lots. Open interests hiked by 3,476 lots to 110,000 lots. Boosted by favorable domestic fiscal policies and improved macroeconomic sentiment, SHFE zinc prices hiked, but to a limited extent amid demand to be seen next week and minimal spot transactions.