Dollar Rebounds, LME Zinc Weakens [SMM Zinc Morning Comment]

Last Friday, LME zinc opened at $2,870/mt. At the beginning of the session, LME zinc fluctuated around the average daily line, reaching a high of $2,876/mt. Subsequently, bulls exited the market, causing LME zinc to consolidate around $2,860/mt. Approaching the night session, LME zinc accelerated its decline to a low of $2,831.5/mt before rebounding to consolidate near the average daily line, eventually closing lower at $2,858/mt, down $10.5/mt, a decrease of 0.37%. Trading volume increased to 5,763 lots, and open interest decreased by 242 lots to 231,000 lots. LME zinc inventory decreased by 1,850 tons to 242,525 tons, a drop of 0.76%, continuing its decline. The stronger-than-expected US PMI data boosted the dollar, leading to weak performance in LME zinc.

Last Friday, the most-traded SHFE zinc 2408 contract opened lower at RMB 23,705/mt. At the beginning of the session, it quickly dipped to RMB 23,625/mt before bulls entered the market, pushing SHFE zinc to rise, with the focus shifting above the average daily line. Approaching the end of the trading session, SHFE zinc quickly surged to a high of RMB 23,955/mt, eventually closing lower at RMB 23,875/mt, down RMB 20/mt, a decrease of 0.08%. Trading volume decreased to 81,430 lots, and open interest increased by 3,365 lots to 96,479 lots. Fundamentally, both supply and demand were weak, and SHFE zinc maintained range-bound consolidation, with short-term attention on the pressure level at the RMB 24,000/mt mark.