Stronger US Dollar Pressures LME Zinc's Upward Momentum [SMM Zinc Morning Comment]

Overnight, the US Fed Beige Book indicated that businesses are increasingly pessimistic about the economic outlook; the new president of the Cleveland Fed was announced; the speed of European bond issuance hit a record, surpassing 1 trillion euros this year; Israel expects to fight for another seven months to destroy Hamas; the IMF raised its forecast for China's economic growth this year to 5%; the State Council announced the gradual removal of restrictions on NEV purchases; SHFE adjusted the trading fees for contracts of gold futures and other varieties.

Overnight, LME zinc opened at $3,120/mt, rising to a high of $3,150/mt during the European session, and hitting a low of $3,097/mt. By the end of the trading session, it slightly recovered and finally closed lower at $3,112/mt, down $7/mt, a decrease of 0.22%. Trading volume increased to 8,691 lots, and open interest increased by 4,235 lots to 241,000 lots. LME zinc inventory decreased by 3,475 mt to 253,725 mt, a decrease of 1.35%, recording a reduction in LME inventory. The stronger US dollar overnight pressured LME zinc's upward momentum, and attention should be paid to the performance of economic data in the evening.

Overnight, the most-traded SHFE 2407 zinc contract opened low at 25,100 yuan/mt, and finally closed higher at 25,260 yuan/mt, up 190 yuan/mt, an increase of 0.76%. Trading volume decreased to 111,000 lots, and open interest decreased by 3,294 lots to 120,000 lots. Domestic macro policies continued to provide support, together with the expectation of production cuts in smelters in June due to tight supply of mines, zinc prices moved above 25,000 yuan/mt.