SMM Zinc Market Morning Comment (Jul 12)

Overnight, LME zinc opened at $2,956/mt, reaching a high of $3,003/mt before dropping to a low of $2,951.5/mt, and closed at $2,951.5/mt, down $5/mt, a decrease of 0.17%. Trading volume was reduced to 7,840 lots, and open interest increased by 477 lots to 239,000 lots. Overnight, LME zinc recorded a bearish candlestick. LME zinc inventory decreased by 1,750 mt to 253,300 mt, a decrease of 0.68%. The US June CPI data was lower than the previous value and expectations, with core CPI data turning negative for the first time in four years. The cooling inflation data continued to boost the US Fed rate cut expectations, causing the price center of LME zinc to slightly move upward.

Overnight, the most-traded SHFE 2409 zinc contract opened at 24,660 yuan/mt, reaching a high of 24,675 yuan/mt, then hitting a low of 24,345 yuan/mt, and closed at 24,355 yuan/mt, down 195 yuan/mt, a decrease of 0.79%. Trading volume was reduced to 43,108 lots, and open interest increased by 68 lots to 75,698 lots. Overnight, SHFE zinc recorded a bearish candlestick, with the 5-day moving average providing support below. In July, as smelters cut production, SMM zinc ingot social inventory increased again by 800 mt to 200,700 mt. The weak consumption trend continued, and poor demand dragged down the performance of SHFE zinc.