SMM Zinc Market Morning Comment (Aug 1)

Overnight, LME zinc opened at $2,645/mt. After the opening, LME zinc moved along the average daily line, initially dipping to $2,645/mt. During the night session, LME zinc quickly surged to a high of $2,719/mt, then fell back to near the average daily line, and finally closed higher at $2,698/mt, up $47.5/mt, an increase of 1.79%. Trading volume increased to 11,373 lots, and open interest rose by 425 lots to 221,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the 10-day moving average forming resistance above. LME zinc inventory decreased by 2,050 mt to 236,375 mt, a drop of 0.86%. The US non-farm payrolls data for July fell more than expected, indicating a slowdown in the US labour market. Together with US Fed officials hinting at a possible rate cut in September, this reinforced market expectations for a rate cut in September, leading to a weaker US dollar index and a rebound in LME zinc prices.

Overnight, the most-traded SHFE zinc 2409 contract opened at 22,850 yuan/mt. At the beginning of the session, SHFE zinc moved around the average daily line, reaching a high of 22,910 yuan/mt, then fell below the average daily line and fluctuated. Approaching the end of the trading session, SHFE zinc dipped to 22,755 yuan/mt and finally closed lower at 22,810 yuan/mt, down 30 yuan/mt, a decrease of 0.13%. Trading volume reduced to 72,697 lots, and open interest increased by 342 lots to 90,105 lots. Overnight, SHFE zinc recorded a bearish candlestick, with the 20-day moving average forming resistance above. The macroeconomic optimism brought by domestic meetings has not yet faded, coupled with the pull from overseas futures prices, SHFE zinc maintained a high-level trend, with its center continuing to shift upwards.