Consumption Remains Resilient, SHFE Zinc Edges Upward [SMM Zinc Morning Comment Dec 6]

Overnight, OPEC+ decided to extend its production cut policy; US initial jobless claims last week unexpectedly exceeded expectations; French President Emmanuel Macron announced that a new prime minister will be appointed in the coming days; South Korea's Democratic Party plans to vote to impeach Yoon Suk-yeol at 6 PM Beijing time on Saturday; the Syrian government forces claimed to have lost control of the strategic central city of Hama; the World Gold Council reported that global central banks net purchased 60 mt of gold in November, with India leading by adding 27 mt; President Xi Jinping emphasized the need to advance the development of the military's cyber information system; the General Office of the CPC Central Committee and the General Office of the State Council issued opinions on promoting the construction of new urban infrastructure to build resilient cities; Vice Premier He Lifeng stated that China is steadily expanding institutional opening in the financial sector and welcomes foreign enterprises to deepen mutually beneficial cooperation.

Overnight, LME zinc opened at $3,084/mt, quickly declined to a low of $3,070.5/mt at the beginning of the session, and then rose to a high of $3,127/mt during European trading hours as bulls increased their positions. It later fluctuated around $3,110/mt and finally closed up at $3,108/mt, an increase of $23/mt or 0.75%. Trading volume decreased to 8,191 lots, and open interest increased by 856 lots to 244,000 lots. Overnight, LME zinc recorded a bullish candlestick, with LME inventory decreasing by 300 mt to 277,800 mt, a drop of 0.11%. LME canceled warehouse warrants reached 106,600 mt. US initial jobless claims last week unexpectedly exceeded expectations, the US dollar weakened, and the center of LME zinc prices shifted upward. It is expected to fluctuate mainly today.

Overnight, the most-traded SHFE zinc 2501 contract opened at 25,600 yuan/mt. At the beginning of the session, SHFE zinc mainly fluctuated along the daily moving average, dipping to a low of 25,530 yuan/mt. Later, as bulls increased their positions towards the end of the session, SHFE zinc fluctuated upward to a high of 25,700 yuan/mt. However, lacking upward momentum, it fell back to near the daily moving average and finally closed up at 25,625 yuan/mt, an increase of 75 yuan/mt or 0.25%. Trading volume decreased to 85,496 lots, and open interest increased by 1,823 lots to 133,000 lots. Overnight, SHFE zinc recorded a small bullish candlestick. Social inventory continued to destock, while consumption remained resilient, and open interest remained at a high level, providing support for SHFE zinc. It is expected to fluctuate mainly today.