Supply Weakness Continues to Support SHFE Zinc at High Levels [SMM Zinc Morning Comment Oct 17]

US Official: Israel to Retaliate Against Iran by November 5; Oil Spill Occurs Near Iran's Largest Oil Export Terminal in the Persian Gulf; Mayor of Nabatieh, Lebanon, and Others Killed in Israeli Airstrike; North Korea Completely Seals Off Roads and Railways Connecting to South Korea; Xi Jinping: Make Every Effort to Ensure Fourth Quarter Economic Work; Market Expects China's Deposit Rates to be Lowered This Month; China Cyberspace Security Association Recommends Systematic Inspection of Intel Products for Cybersecurity Risks; PBOC and Ministry of Science and Technology Deploy Technology Financial Services in Key Regions.

Overnight, LME zinc opened at $3,051/mt, fluctuated around the daily moving average after the opening, quickly fluctuated upward to a high of $3,105/mt during midday, then fell below the daily moving average during the night session, hitting a low of $3,039.5/mt. LME zinc slightly rebounded at the end of the session, closing up at $3,062/mt, an increase of $10/mt or 0.33%. Trading volume decreased to 11,456 lots, and open interest decreased by 5,782 lots to 254,000 lots. Overnight, LME zinc recorded a bullish candlestick, with support from the lower Bollinger Band. LME zinc inventory increased by 1,225 mt to 240,525 mt, an increase of 0.51%. The US dollar index remained high, and ongoing geopolitical conflicts led to some market risk aversion sentiment. Coupled with market expectations for China's real estate sector, LME zinc's focus slightly rebounded.

Overnight, the most-traded SHFE zinc 2411 contract opened at 25,330 yuan/mt, initially reaching a high of 25,430 yuan/mt, then declined all the way, hitting a low of 24,990 yuan/mt near the end of the session, and finally closed down at 25,110 yuan/mt, a decrease of 190 yuan/mt or 0.75%. Trading volume decreased to 77,338 lots, and open interest decreased by 3,538 lots to 107,000 lots. Overnight, SHFE zinc recorded a bearish candlestick, with support from the 20-day moving average below. The fundamental supply weakness continued to provide support. Additionally, the State Council Information Office held a press conference on real estate today, and the market is waiting for more macro guidance, keeping SHFE zinc at high levels.