Supply and Demand Remain Weak, Zinc Prices Maintain Fluctuating Trend [SMM Zinc Morning Comment Oct 31]

Overnight, the US Q3 GDP was below expectations, while October's ADP employment data exceeded expectations significantly. Various sources indicated that a ceasefire between Israel and Lebanon is imminent. The Kremlin denied reports of "preliminary talks between Ukraine and Russia on stopping attacks on each other's energy facilities." Sources suggested that OPEC+ might continue to delay its production increase plans. Germany's Q3 GDP was better than expected, leading traders to reduce their expectations of a 50 basis point interest rate cut by the European Central Bank in December. The Ministry of Commerce stated that China firmly opposes the final US rules on investment restrictions against China. Six departments urged the acceleration of large wind and solar power base construction, focusing on desert, Gobi, and barren areas. Some central enterprises have already modified energy storage bidding rules, reducing the weight of price, involving the wind and solar power storage industry. BYD surpassed Tesla in quarterly revenue for the first time.

Overnight, LME zinc opened at $3,123/mt. Initially, LME zinc fluctuated around the daily moving average, then fluctuated downward below the daily moving average, with the focus hovering around $3,107/mt. Subsequently, LME zinc slightly moved upward, fluctuating around the daily moving average, reaching a high of $3,148/mt. During the night session, LME zinc's focus moved downward to a low of $3,074/mt, and by the end of the session, it slightly moved upward again, fluctuating around $3,085/mt, closing down at $3,087/mt, a decrease of $40/mt or 1.28%. Trading volume decreased to 72,416 lots, and open interest decreased by 1,851 lots to 253,000 lots. Overnight, LME zinc recorded a bearish candlestick, with the upper Bollinger Bands forming resistance and the 40-day moving average providing support below. LME inventory decreased by 2,100 mt to 241,225 mt, a reduction of 0.86%. Currently, the US Q3 GDP is below expectations, and although October's "small non-farm payrolls" data performed well, the market is significantly affected by the Q3 GDP data results. LME zinc is expected to maintain a fluctuating trend.

Overnight, the most-traded SHFE zinc 2412 contract opened at 24,960 yuan/mt. Initially, with increased long positions, SHFE zinc fluctuated widely around the daily moving average, reaching a low of 24,945 yuan/mt. Subsequently, with increased short positions, SHFE zinc fluctuated upward, reaching a high of 25,085 yuan/mt. Then, with reduced long positions, SHFE zinc fluctuated downward, and by the end of the session, it fluctuated narrowly around 24,980 yuan/mt, closing down at 24,985 yuan/mt, a decrease of 45 yuan/mt or 0.18%. Trading volume decreased to 73,547 lots, and open interest increased by 1,842 lots to 115,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 10-day moving average forming resistance above and the middle Bollinger Bands providing support below. Currently, although supply-side inventory has slightly increased, the upcoming seasonal production reduction in northern mines and winter stockpiling demand keep the supply tight. Downstream consumption has not shown significant highlights, and zinc prices are expected to hover at highs.