Bulls Reduce Positions and Exit, Shanghai-London Records a Bareheaded Bearish Candle [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $2,863/mt. In early trading, a tug-of-war between longs and shorts caused LME zinc to fluctuate rangebound around the daily moving average. During European trading hours, increased long positions pushed LME zinc to a high of $2,905/mt, but subsequently, increased short positions pressured the center of LME zinc downward to around $2,865/mt. It eventually closed lower at $2,861/mt, down $1.5/mt or 0.05%. Trading volume decreased to 10,178 lots, while open interest increased by 636 lots to 219,000 lots. Overnight, LME zinc recorded a long upper shadow bearish candlestick, with resistance formed by various moving averages above. A stronger US dollar exerted pressure on zinc prices, but a fire at the Perilya lead-zinc mine in Australia disrupted supply, with the impact yet to be estimated, limiting the extent of zinc price declines.

Overnight, the most-traded SHFE zinc 2502 contract opened higher at 24,355 yuan/mt. In early trading, reduced long positions led SHFE zinc to move downward along the daily moving average, hitting a low of 24,075 yuan/mt. Subsequently, increased long positions drove a "V"-shaped rebound, with the center fluctuating along the daily moving average. It eventually closed lower at 24,175 yuan/mt, down 65 yuan/mt or 0.27%. Trading volume decreased to 50,963 lots, while open interest decreased by 37 lots to 96,149 lots. Overnight, SHFE zinc recorded a bearish candlestick with no upper shadow, with resistance formed by the 10-day moving average above. Overnight, domestic and international zinc prices fell in tandem. As downstream enterprises gradually enter holiday mode, SMM social inventory also saw an inventory buildup of 3,000 mt, suggesting zinc prices may continue to fluctuate downward.