Downstream Consumption Continued to Drag, SHFE Zinc Fluctuated at High Levels [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,767.5/mt, initially dipped to $2,767.5/mt, and then fluctuated upward above the daily average line to a high of $2,811/mt. Near the end of the session, LME zinc slid straight down below the daily average line, maintaining a fluctuating trend at the end of the session, and finally closed at $2,790.5/mt, an increase of $20.5/mt or 0.74%. Trading volume increased to 8,029 lots, and open interest decreased by 1,463 lots to 217,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the 5-day moving average providing support. LME inventory decreased by 600 mt to 260,000 mt, a decline of 0.23%. As market concerns about a US economic recession eased, the US dollar index continued to decline, boosting LME zinc prices. The overall price focus continued to shift upward, with attention on subsequent speeches by US Fed officials.

Overnight, the most-traded SHFE zinc 2410 contract opened at 23,400 yuan/mt, initially reached a high of 23,400 yuan/mt, then fluctuated downward throughout the session, hitting a low of 23,250 yuan/mt near the end, and finally closed at 23,275 yuan/mt, a decrease of 30 yuan/mt or 0.13%. Trading volume decreased to 39,381 lots, and open interest increased by 1,292 lots to 96,887 lots. Overnight, SHFE zinc recorded a bearish candlestick, with the 5-day moving average providing support. SMM reported on Monday that zinc ingot inventories in seven regions continued to decrease. However, ferrous metals prices continued to drag down galvanized consumption. In the off-season for downstream consumption, SHFE zinc lacked upward momentum, resulting in a slight decline in the night session.