SMM Zinc Market Morning Comment (Aug 5)

Last Friday, LME zinc opened at $2,676/mt. At the beginning of the session, LME zinc fluctuated upwards, trading above the average daily line. During the European trading session, it peaked at $2,717/mt. Subsequently, bears targeted the high levels, causing LME zinc to move downwards near the average daily line. Entering the night session, LME zinc accelerated its decline, hitting a low of $2,648/mt at the end of the trading session, and finally closed at $2,662/mt, down $18.5/mt or 0.69%. Trading volume decreased to 9,792 lots, and open interest increased by 2,773 lots to 221,000 lots. Last Friday, LME zinc recorded a long upper shadow bearish candlestick, with the 10-day moving average forming resistance. LME zinc inventory decreased by 2,125 mt to 232,550 mt, a drop of 0.91%, continuing its downward trend. Despite the US employment data being significantly lower-than-expected and the US Fed's rate cut expectations strengthening, poor US economic data heightened recession concerns, causing LME zinc to rise and then fall back.

Last Friday, the most-traded SHFE zinc contract 2409 opened lower at 22,860 yuan/mt. At the beginning of the session, after a brief high of 22,885 yuan/mt due to a tug-of-war between long and short positions, increased short positions pressured SHFE zinc to fall to a low of 22,395 yuan/mt. After a slight pullback at the end of the trading session, it closed at 22,570 yuan/mt, down 290 yuan/mt or 1.27%. Trading volume decreased to 105,000 lots, and open interest increased by 3,395 lots to 87,587 lots. Last Friday, SHFE zinc recorded a bearish candlestick, with the KDJ indicator expanding downwards. Due to poor overseas economic data, SHFE zinc traded weakly. However, the supply side still supported zinc prices, limiting the extent of the decline.