Overnight, Trump expressed full support for Johnson's re-election as Speaker of the US House of Representatives; the US Treasury Secretary announced an additional $3.4 billion budget aid package for Ukraine; Brazil's central bank intervened repeatedly to support its currency, which has still depreciated 22% this year; South Korea's acting president Choi Sang-mook was placed under police investigation; the central bank issued its first penalties for bond market violations, with three institutions under investigation; three policy banks are set to issue a record-high volume of bonds in Q1 next year; the National Association of Financial Market Institutional Investors (NAFMII) recommended stricter measures against "short essays" in the capital market; reports indicated that BYD has launched a humanoid robot project, to which the company responded with "no comment."
Overnight, LME zinc opened at $3,036.5/mt. In early trading, longs increased their positions, driving LME zinc upward and consolidating around $3,050/mt, with a high of $3,061/mt during the session. By the night session, longs reduced their positions, and LME zinc declined throughout, hitting a low of $3,016/mt near the session's end and closing down at $3,017/mt, a decrease of $23/mt or 0.76%. Trading volume increased to 7,072 lots, while open interest decreased by 1,315 lots to 224,000 lots. Overnight, LME zinc formed a long upper shadow bearish candlestick. LME inventory decreased by 6,625 mt to 237,875 mt, a drop of 2.71%. The US dollar index continued to hover near a two-year high, driven by market expectations that Trump's policies, including deregulation, tax cuts, higher tariffs, and stricter immigration controls, would persist, suppressing LME zinc's performance. Domestic consumption also weakened seasonally, and the market awaited guidance from China's manufacturing PMI. LME zinc is expected to fluctuate today.
Overnight, the most-traded SHFE zinc 2502 contract opened at 25,290 yuan/mt. SHFE zinc initially moved upward but lacked upward momentum, causing its center to shift downward. Later, with longs increasing their positions, SHFE zinc's center moved upward near the daily moving average for consolidation. Subsequently, shorts increased their positions, and SHFE zinc fluctuated downward, hitting a low of 25,255 yuan/mt and closing down at 25,270 yuan/mt, a decrease of 55 yuan/mt or 0.22%. Trading volume decreased to 50,690 lots, while open interest fell by 329 lots to 140,000 lots. Overnight, SHFE zinc formed a small bearish candlestick, with resistance from the 5-day moving average and support from the 10-day moving average. Fundamentally, smelters have largely completed winter stockpiling, raw material inventory has grown, and the tight ore supply situation has further eased. Consumption also showed seasonal declines, with end-user construction gradually wrapping up as the Chinese New Year approaches. These factors weakened fundamental support for zinc. However, warehouse warrants remain relatively low. SHFE zinc saw a slight decline and awaits further macroeconomic guidance. It is expected to consolidate today.
