No Significant Improvement in Fundamentals, SHFE Zinc Hovers at High Levels [SMM Morning Comment]

Overnight, LME zinc opened at $2,855/mt, briefly fluctuated around the average daily line at the beginning, then rose above the average daily line, reaching a session high of $2,885.5/mt. During the night session, LME zinc surged and then quickly fell to a session low of $2,837.5/mt, before rebounding to near the average daily line by the end of the trading session, closing up $11.5/mt, or 0.4%, with a trading volume reduced to 5,935 lots and open interest down by 828 lots to 232,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the 10-day moving average providing support. LME zinc stocks decreased by 2,350 mt to 247,100 mt, down 0.94%. The impact of lower-than-expected US economic data continued, with market sentiment expecting at least one rate cut this year. The US dollar index fluctuated, and LME stocks continued to decline, leading to a continued rebound in LME zinc prices.

Overnight, the most-traded SHFE zinc contract (2408) opened at ¥23,885/mt, briefly touched a high of ¥23,920/mt at the beginning, then fluctuated downwards to a session low of ¥23,695/mt, before rebounding to near the average daily line and finally closing down at ¥23,760/mt, down ¥75/mt, or 0.31%, with a trading volume reduced to 65,293 lots and open interest increased by 65 lots to 94,053 lots. Overnight, SHFE zinc recorded a bearish candlestick, with the 20-day moving average providing support. There was no significant improvement in fundamentals, and SHFE zinc remained hovering at high levels. Downstream consumption may weaken MoM during the off-season, limiting the upward space for zinc prices.