Market sentiment continues; SHFE zinc rises [SMM Morning Comment Oct 14]

SMM, Oct 14: The US September PPI annual rate recorded 1.8%, with the previous value revised up to 1.9%. Israel narrowed its strike targets on Iran. The General Staff of the Korean People's Army issued combat readiness instructions. SpaceX completed its first "chopstick rocket" recovery test. Japan's stock market saw the largest weekly capital outflow in 20 years. The Ministry of Finance announced four incremental policies. The Shanghai Securities Regulatory Bureau warned against violating the red line on illegal reductions. China successfully recovered its first reusable returnable technology test satellite.

Last Friday, LME zinc opened at $3,096.5/mt. After opening, LME zinc fluctuated around the daily average line, dipped slightly to $3,081/mt at midday, then rebounded and rose all the way, peaking at $3,160/mt by the end of the session, closing up at $3,156/mt, an increase of $57/mt, or 1.84%. Trading volume decreased to 10,637 lots, and open interest increased by 1,473 lots to 262,000 lots. Last Friday, LME zinc recorded a bullish candlestick, with the 20-day moving average providing support below. LME zinc inventory decreased by 450 mt to 24,200 mt, a decline of 0.19%. The US Fed's September PPI data reinforced market expectations for an interest rate cut, and the US dollar index fell back from highs, boosting zinc prices to continue rising, with LME zinc's focus increasing.

Last Friday, the most-traded SHFE zinc 2411 contract opened at 25,450 yuan/mt. Initially, SHFE zinc dipped to 25,400 yuan/mt, then rose all the way, peaking at 25,780 yuan/mt by the end of the session, closing up at 25,760 yuan/mt, an increase of 410 yuan/mt, or 1.62%. Trading volume decreased to 76,617 lots, and open interest increased by 2,690 lots to 122,000 lots. Last Friday, SHFE zinc recorded a bullish candlestick, with the 5-day moving average providing support below. Driven by overseas market trends and improved domestic downstream zinc demand, SHFE zinc also rose.