SMM Zinc Market Morning Comment (July 26)

Overnight, LME zinc opened at $2,674.5/mt. In the early session, LME zinc fluctuated widely along the average daily line and dipped to $2,632.5/mt during European trading hours. As shorts reduced their positions in the night session, LME zinc quickly surged to a high of $2,692/mt and closed at $2,692/mt, up $17.5/mt or 0.65%. Trading volume increased to 12,538 lots, and open interest decreased by 54 lots to 219,000 lots. Overnight, LME zinc recorded a bullish candlestick, with LME inventory decreasing by 1,575 mt to 243,975 mt, a drop of 0.64%. US GDP and PCE data were lower-than-expected, causing the dollar to decline. The slowdown in inflation kept expectations for a US Fed rate cut in September unchanged, leading to a rebound in LME zinc. It is expected that LME zinc will fluctuate today.

Overnight, the most-traded SHFE zinc 2409 contract opened at 23,050 yuan/mt. In the early session, funds entered the market, pushing SHFE zinc upward, with its price center shifting to around 22,740 yuan/mt. During this period, it reached a high of 22,780 yuan/mt and finally closed at 22,760 yuan/mt, up 190 yuan/mt or 0.84%. Trading volume decreased to 95,358 lots, and open interest increased by 1,191 lots to 97,801 lots. Overnight, SHFE zinc recorded a bullish candlestick. Domestic inventory continued to decrease, together with lower-than-expected US economic data, causing the dollar to decline and non-ferrous metals prices to strengthen. It is expected that SHFE zinc will consolidate today.