Confidence in Domestic Policy Release Remains High, SHFE Zinc Focus Shifts Upward [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,970/mt, hitting the intraday low at the opening. Subsequently, shorts reduced their positions, and LME zinc fluctuated upward, reaching a high of $3,092/mt during the night session. However, lacking upward momentum, LME zinc fluctuated along the daily moving average and finally closed up at $3,071/mt, an increase of $105/mt or 3.54%. Trading volume decreased to 13,591 lots, and open interest fell by 4,413 lots to 243,000 lots. Overnight, LME zinc recorded a bullish candlestick with no lower shadow. LME inventory decreased by 100 mt to 245,225 mt, a decline of 0.04%. On the macro front, the disturbance from Trump's election victory has ended, the US dollar weakened, and the US Fed is still expected to cut interest rates. Base metals generally rose, with LME zinc pulling up. LME zinc is expected to fluctuate at high levels today.

Overnight, the most-traded SHFE zinc 2412 contract opened at 25,300 yuan/mt. At the beginning of the session, longs increased their positions, and SHFE zinc fluctuated upward, reaching a high of 25,430 yuan/mt. Later, SHFE zinc fluctuated along the daily moving average and finally closed up at 25,290 yuan/mt, an increase of 120 yuan/mt or 0.48%. Trading volume decreased to 77,078 lots, and open interest increased by 4,356 lots to 108,000 lots. Overnight, SHFE zinc recorded a small bearish candlestick. Market sentiment gradually recovered from the negative sentiment brought by the US election. There are still expectations for domestic policy release, ferrous metals prices rebounded, and SHFE zinc focus shifted upward. SHFE zinc is expected to fluctuate at high levels today.