Domestic downstream demand weakened, and SHFE zinc subsequently declined [SMM Zinc Morning Comment]

LME zinc opened at $2465.5/mt last Friday evening, and hit a high of $2483.5/mt before falling back to a low of $2437/mt, and closed at $2451.1/mt, a decrease of $18.5/mt or 0.75%. The trading volume decreased to 10930 lots, and open interest added 2713 lots to 222,000 lots. LME zinc inventory decreased by 550 mt or 0.28% to 198325 mt, a drop of 0.28%. The U.S. non-farm payrolls increased by 353,000 in January after seasonally adjustment, the largest increase since January 2023. The labor market performed strongly, the U.S. dollar index rose rapidly, and the macroeconomic pressure suppressed zinc prices.

The most active SHFE 2403 zinc contract prices opened at 20715 yuan/mt and fell 40 yuan/mt or 0.19% to close at 20675 yuan/mt in last Friday evening trading, with the high-end of 20760 yuan/mt and the low-end of 20620 yuan/mt. Trading volumes decreased to 34216 lots and open interest grew 998 lots to 80419 lots. Downstream demand weakened again, spot transactions were light, and the fundamental support for zinc prices weakened.