No Significant Improvement in Fundamentals, SHFE Zinc Weakly Fluctuating [SMM Morning Comment]

Last Friday, LME zinc opened at $2,873.5/mt, initially touched a high of $2,873.5/mt, then fell all the way to a low of $2,759/mt. By the end of the trading session, LME zinc rebounded and closed lower at $2,790/mt, down $80/mt, a decrease of 2.79%. Trading volume increased to 12,253 lots, and open interest increased by 13,807 lots to 231,000 lots. LME zinc recorded a bearish candlestick, with the 10-day moving average forming resistance above. LME zinc inventory decreased by 1,700 mt to 254,200 mt, a decrease of 0.66%. Macro sentiment remained poor, with fluctuating expectations of the US Fed, and the US dollar index continued to strengthen, suppressing the performance of non-ferrous metals, leading to a decline in LME zinc.

Last Friday, the most-traded SHFE zinc contract (2408) opened at 23,300 yuan/mt, initially fell to a low of 23,175 yuan/mt, then rebounded above the daily moving average as longs reduced positions, touched a high of 23,445 yuan/mt, and narrowly fluctuated by the end of the trading session, finally closing lower at 23,400 yuan/mt, down 140 yuan/mt, a decrease of 0.59%. Trading volume increased to 73,018 lots, and open interest increased by 619 lots to 79,575 lots. SHFE zinc recorded a bullish candlestick, with the lower Bollinger Bands providing support. The US dollar index remained high, putting macro pressure on zinc prices. With the fundamentals of upstream and downstream sectors entering the off-season, demand weakened, and SHFE zinc lacked upward momentum, overall operating weakly and fluctuating.