Positive Domestic Macro News Released, SHFE Zinc Center Moves Upward [SMM Zinc Morning Comment Dec 25]

Overnight, some major US banks are expected to sue the US Fed; Biden is considering imposing new sanctions on Russia's energy sector; South Korea has entered a "super-aged society"; the State Council Executive Meeting emphasized the role of intermediary institutions as "gatekeepers" in the capital market; the Ministry of Finance stated that the fiscal deficit ratio is expected to increase in 2025.

Overnight, LME zinc opened at $2,995.5/mt, initially dipped to $2,992/mt, then fluctuated upward above the daily moving average, with the center fluctuating rangebound around $3,034/mt and reaching a high of $3,053/mt during the session. It eventually closed higher at $3,034/mt, up $35.5/mt or 1.18%. Trading volume decreased to 51,317 lots, and open interest fell by 1,615 lots to 227,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the middle Bollinger Band providing resistance above and the lower Bollinger Band offering support below. LME inventory decreased by 3,025 mt to 248,950 mt, a decline of 1.20%, marking a reduction in LME inventory. The continuous decline in LME inventory is expected to provide some support for zinc prices. Today, LME zinc is closed for Christmas.

Overnight, the most-traded SHFE zinc 2502 contract opened higher with a gap at 25,340 yuan/mt. Initially, it fluctuated slightly near the daily moving average, then surged upward to a high of 25,435 yuan/mt as bulls increased positions. However, as bears increased positions, SHFE zinc fluctuated downward slightly. By the end of the session, bulls reduced positions and exited, causing SHFE zinc to continue its downward trend, eventually closing higher at 25,350 yuan/mt, up 120 yuan/mt or 0.48%. Trading volume decreased to 74,153 lots, while open interest increased by 2,170 lots to 141,000 lots. Overnight, SHFE zinc recorded a bullish candlestick, with the 10-day moving average providing support below. The National Fiscal Work Conference set a positive tone, with the Ministry of Finance stating that the fiscal deficit ratio is expected to increase in 2025. Meanwhile, domestic spot zinc remains tight, supporting the upward movement of SHFE zinc's center.