LME Zinc Fluctuates at High Levels [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,935/mt, initially dipping slightly along the average daily line, then bulls entered the market at low levels, pushing LME zinc upwards to a high of $2,961.5/mt. Entering the night session, LME zinc rose again, but the upward momentum was insufficient, hitting a low of $2,918/mt, and finally slightly pulling back to close flat at $2,944/mt. Overnight, LME zinc recorded three consecutive days of gains, with the 40-day moving average forming resistance. Overnight, LME zinc inventory decreased by 250 mt to 239,600 mt, a drop of 0.1%. A series of weak economic data overnight increased the likelihood of a US interest rate cut, but the downward revision of US economic growth kept zinc prices fluctuating.

Overnight, the most-traded SHFE zinc 2408 contract opened at 24,215 yuan/mt, initially rising along the average daily line to a high of 24,340 yuan/mt, then slightly dipping to 24,260 yuan/mt. Subsequently, bulls took profits and exited the market, accelerating the decline of SHFE zinc to a low of 24,140 yuan/mt, and finally closing lower at 24,210 yuan/mt, down 5 yuan/mt, a drop of 0.02%. Trading volume decreased to 93,667 lots, and open interest increased by 1,119 lots to 92,635 lots. On the fundamentals side, the expectation of smelter production cuts supports high zinc prices, but overall performance in the off-season is poor, and social inventories have increased again, indicating insufficient upward momentum for zinc prices.