Last Friday, LME zinc opened at $2,942/mt. Initially, longs increased their positions, pushing LME zinc upward to a session high of $2,969/mt during European trading hours. However, a significant increase in LME zinc inventory led to a sharp drop to $2,930/mt. Shorts took profits and exited, causing LME zinc to trend upward again. During the night session, shorts increased their positions, leading to a downward trend, and it finally closed lower at $2,941/mt, down $3/mt, or 0.10%. Trading volume increased to 11,388 lots, and open interest increased by 3,508 lots to 240,000 lots. LME zinc inventory increased by 22,475 mt to 262,075 mt, an increase of 9.38%. Bearish fundamentals, with a significant increase in LME zinc inventory reducing supply concerns, and the US core PCE data being lower-than-expected, suggest that LME zinc is expected to trend weakly.
Last Friday, the most-traded SHFE zinc contract opened at 24,660 yuan/mt. Initially, SHFE zinc briefly trended upward, reaching a high of 24,685 yuan/mt. However, funds exited, dragging SHFE zinc downward to a session low of 24,450 yuan/mt. It finally closed lower at 24,480 yuan/mt, down 185 yuan/mt, or 0.75%. Trading volume decreased to 89,135 lots, and open interest decreased by 7,909 lots to 98,560 lots. While supply concerns eased, tight ore supply continued to support zinc prices, suggesting that SHFE zinc is expected to trend sideways.
