US Dollar Index Rises Again, SHFE Zinc Focus Declines [SMM Zinc Morning Comment Nov 11]

Trump sweeps seven swing states, plans to exert maximum pressure on Iran; Biden administration purchases the last 2.4 million barrels of strategic petroleum reserves; reports suggest Israel is weighing the possibility of a timed ceasefire agreement with Lebanon; the value of Russia's gold reserves surpasses $200 billion for the first time in history; the Standing Committee of the National People's Congress reviews and approves the largest debt relief measures in recent years; 24 departments in China jointly issue a document to further promote elderly care service consumption; China's monetary policy implementation report: intensifying monetary policy regulation; the CSRC holds two consecutive symposiums.

Last Friday, LME zinc opened at $3,063/mt, initially touched $3,071/mt, then fluctuated downward, hitting a low of $2,970/mt near the close, and finally closed down at $2,984/mt, a drop of $87/mt or 2.83%. Trading volume decreased to 12,422 lots, and open interest increased by 113 lots to 243,000 lots. Last Friday, LME zinc recorded a bearish candlestick, with the 10-day moving average forming resistance above. LME zinc inventory remained flat at 245,225 mt. Last Friday, no unexpected supportive policies were released at the domestic meeting, macro sentiment deteriorated, market concerns about demand persisted, and the US dollar index climbed again, causing LME zinc to decline continuously during the session.

Last Friday, the most-traded SHFE zinc 2412 contract opened at 24,820 yuan/mt, initially dipped to 24,810 yuan/mt, then fluctuated upward to a high of 25,055 yuan/mt, before falling below the daily moving average and fluctuating rangebound, finally closing down at 24,855 yuan/mt, a drop of 170 yuan/mt or 0.68%. Trading volume decreased to 73,281 lots, and open interest decreased by 2,060 lots to 99,582 lots. Last Friday, SHFE zinc recorded a long upper shadow bullish candlestick, with the middle Bollinger Band forming resistance. SMM expects November zinc ingot production to decrease MoM to below 500,000 mt. The off-season for downstream also arrives, and the weak supply and demand pattern in the fundamentals remains unchanged. Coupled with the drag from deteriorating macro sentiment, the focus of SHFE zinc also declines significantly.