With Lower-than-Expected US PMI Data, LME Zinc Focus Shifted Upward [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,830/mt. Initially, with an increase in short positions, LME zinc fluctuated downward to a low of $2,890/mt. Subsequently, with an increase in long positions, LME zinc fluctuated upward during the night session, reaching a high of $2,851.0/mt, and then fluctuated around $2,835/mt. It finally closed at $2,849.5/mt, an increase of $16/mt or 0.56%. Trading volume increased to 11,434 lots, and open interest rose by 1,205 lots to 221,000 lots. Overnight, LME zinc recorded a long lower shadow bullish candlestick, with LME zinc inventory decreasing by 1,900 mt to 241,325 mt, a drop of 0.78%. The US ISM Manufacturing New Orders Index fell to its lowest level since May 2023. Both PMI and July construction spending data were lower than expected, reigniting market concerns about economic slowdown, leading to a weaker dollar and an upward shift in LME zinc focus.

Overnight, the most-traded SHFE zinc 2410 contract opened at 23,430 yuan/mt. Initially, SHFE zinc fluctuated near the daily moving average. Subsequently, with a reduction in short positions, SHFE zinc fluctuated upward, reaching a high of 23,705 yuan/mt by the end of the session, and finally closed at 23,650 yuan/mt, an increase of 110 yuan/mt or 0.49%. Trading volume decreased to 109,000 lots, and open interest decreased by 836 lots to 111,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 5/10-day moving averages forming resistance above and the 20-day moving average providing support below. Macro sentiment was positive, with US manufacturing PMI data lower than expected, and there were still certain expectations for traditional "September-October peak season" consumption in China, leading to an upward shift in SHFE zinc focus driven by LME zinc.