[SMM zinc morning comment] The upside space for SHFE zinc may be limited

Overnight, LME zinc opened at $2496/mt, hitting a low and high of $2486.5/mt and $2540/mt respectively, and closed at $2529/mt, up $38.5/mt or 1.55%. Trading volume increased to 15249 lots, and open interest decreased 2905 lots to 229,000 lots. LME zinc inventory dropped by 2325 or 0.85% to 272575 mt. Federal Reserve official Powell's dovish speech boosted the market's confidence in interest rate cuts, the US dollar continued to weaken, and the early market optimism has not been fully digested, and the macro boost led to another rise in zinc.

Overnight, the most active SHFE 2404 zinc contract opened higher at 21,210 yuan/ton.It touched a high of 21,235 yuan/ton and a low of 21,135 yuan/ton, and finally closed up at 21,165 yuan/ton, up 205 yuan/ton, or 0.98%. The trading volume decreased to 48,273 lots, and the open interest decreased by 2,372 lots to 91,652 lots. Recently, downstream spot consumption has been poor, and imported zinc ingots continue to flow in, which may make up for the output reduction in maintenance and production shutdowns of some domestic smelters. It is expected that SHFE zinc will have little upside room.