Hints of More Basis Points Rate Cuts, LME Zinc to Fluctuate Downward [SMM Zinc Morning Comment]

SMM, Sep 23: Last Friday, US Fed Governor Waller hinted at additional 50 basis points rate cuts; British media reported that Israel plans to conduct ground operations in Lebanon; Trump rejected Harris's invitation for another TV debate; a large-scale port strike is imminent, posing a major threat to the US supply chain; the fifth meeting of the China-US Economic Working Group was held; the CSRC revised and issued regulations on risk control indicators for securities companies.
Last Friday, LME zinc opened at $2,933.5/mt. Initially, LME zinc fluctuated rangebound around the daily moving average, then moved above it and peaked at $2,955/mt. By the European trading session, LME zinc fell back to fluctuate rangebound around the daily moving average, then SHFE zinc fluctuated downward in a stepwise manner below the daily moving average and hit a low of $2,866.5/mt. By the end of the session, LME zinc slightly moved up to fluctuate rangebound around $2,875/mt. During this period, LME zinc broke above the daily moving average but quickly fell back, closing down at $2,867/mt, a drop of $72.5/mt or 2.47%. Trading volume increased to 116,000 lots, and open interest decreased by 3,211 lots to 240,000 lots. Last Friday, LME zinc recorded a bearish candlestick with no lower shadow, with the upper Bollinger Bands forming resistance and the 10/60-day moving averages providing support below. LME social inventory decreased by 650 mt to 256,150 mt, a drop of 0.25%. Currently, with the US Fed Governor hinting at more 50 basis points rate cuts and about 45,000 workers at 36 US ports planning to strike on October 1, LME zinc was expected to fluctuate downward.
Last Friday, the most-traded SHFE zinc 2411 contract opened at 23,905 yuan/mt. Initially, with shorts increasing positions, SHFE zinc briefly fluctuated rangebound around the daily moving average and peaked at 23,920 yuan/mt. It then fluctuated downward below the daily moving average and hit a low of 23,620 yuan/mt. Subsequently, with shorts reducing positions, SHFE zinc's center of gravity slightly moved up to fluctuate rangebound around 23,700 yuan/mt, closing down at 23,700 yuan/mt, a drop of 310 yuan/mt or 1.29%. Trading volume decreased to 69,340 lots, and open interest increased by 898 lots to 101,000 lots. Last Friday, SHFE zinc recorded a bearish candlestick, with the daily K-line center of gravity moving downward, the upper Bollinger Bands forming resistance, and the 10/60-day moving averages providing support below. Currently, the supply side output remains low, and the demand side is also in a weak state. With both supply and demand weak, SHFE zinc was expected to fluctuate downward.