The U.S. service industry PMI in February was lower than expected and LME zinc rose [SMM zinc morning comment]

Overnight, LME zinc opened at $2441.5/mt, hitting a low and high of $2434/mt and $2473.5/mt respectively, and closed at $2454/mt, up $5/mt or 0.2%. Trading volume increased to 11203 lots, and open interest grew 1261 lots to 232,000 lots. LME zinc inventory dropped by 650 to 275150 mt. The market continues to bet on the Federal Reserve cutting interest rates in June. The U.S. service industry PMI in February was lower than expected and recorded 52.6, a decline from January. After the data was released, the U.S. dollar index "dived from a high level", and LME zinc continued to rise.

The most-traded SHFE 2404 zinc contract opened at 20740 yuan/mt overnight and fell to 20705 yuan/mt before rallying to a peak of 20820 yuan/mt. It eventually settled at 20775 yuan/mt, up 85 yuan/mt or 0.41%. Trading volume grew to 47564 lots, and open interest decreased by 1343 lots to 99706 lots. The market has positive expectations for the two sessions. In addition, there will be more maintenance of smelters in March, and the supply of zinc ingots may not recover as scheduled, which will boost the SHFE zinc price.