Market Factors Are Mixed, SHFE Zinc Maintains Fluctuating Trend [SMM Zinc Morning Comment]

Overnight, the LME zinc contract opened at $3,370/mt. At the beginning of the session, it fluctuated downward, probing a low of $3,238/mt, before the price gradually rebounded and touched a high of $3,377/mt. After entering the night session, it maintained a fluctuating trend and finally closed down at $3,318.5/mt, down $51.5/mt, a decrease of 1.53%. Trading volume increased to 153,000 lots, while open interest decreased by 3,702 lots to 236,000 lots. Overnight, LME zinc recorded a bearish candlestick with a long lower shadow. The 5-day daily average line exerted pressure above, while the middle Bollinger Band provided support below. As investors weighed the policy outlook under Wash's leadership of the US Fed and the US manufacturing sector's return to expansion territory in January, the US dollar index continued its upward trend, and the center of LME zinc moved lower.

Overnight, the most-traded SHFE zinc 2603 contract opened higher with a gap at 24,975 yuan/mt. At the beginning of the session, SHFE zinc dipped slightly to 24,615 yuan/mt, before a reduction in positions by bears pushed SHFE zinc higher, touching a high of 25,065 yuan/mt. It maintained a fluctuating trend toward the end of the session and finally closed up at 24,890 yuan/mt, up 375 yuan/mt, an increase of 1.53%. Trading volume decreased to 181,000 lots, while open interest decreased by 4,974 lots to 86,235 lots. Overnight, SHFE zinc recorded three consecutive bearish candlesticks. The 5-day daily average line exerted pressure above, while the 40-day and 60-day daily average lines provided support below. As time passes, more enterprises are taking holidays, leading to some inventory buildup in domestic social inventory. However, TCs continue to fluctuate at lows, and coupled with recent frequent macro disturbances, zinc prices are expected to hover at highs in the short term.

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