Driven by Higher LME Prices, SHFE Zinc Opened Higher with a Gap [SMM Zinc Morning Comment]

Overnight, LME zinc opened at $3,397.5/mt. Early in the session, LME zinc saw small fluctuations downward, dipping to $3,392.50/mt. Subsequently, bulls increased positions and pushed prices to fluctuate upward, reaching a high of $3,461.00/mt. Late in the session, LME zinc pulled back slightly, ultimately closing higher at $3,447.00/mt, up $37.5/mt or 1.10%. Trading volume increased to 87,481 lots, and open interest increased by 892 lots to 237,000 lots. On May 7, LME zinc inventory decreased by 375 mt to 94,425 mt. Overnight, LME zinc posted a three-day winning streak, with various moving averages below providing support. Trump extended the deadline for the EU to approve a tariff agreement, coupled with market expectations that the US and Iran may reach a temporary ceasefire agreement. The resonance of geopolitical and trade sentiment drove the center of LME zinc prices steadily higher.

Overnight, the most-traded SHFE zinc 2606 contract opened higher with a gap at 24,350 yuan/mt. Early in the session, SHFE zinc briefly rose to a high of 24,410 yuan/mt, then pulled back under pressure. Near the end of the session, it moved below the daily average line, dipping to 24,280 yuan/mt, ultimately closing higher at 24,315 yuan/mt, up 30 yuan/mt or 0.12%. Trading volume decreased to 41,272 lots, and open interest increased by 895 lots to 90,766 lots. According to SMM market communication, as of May 6, China's inventory increased by 3,300 mt to 255,900 mt. Overnight, SHFE zinc posted a bearish candlestick, with various moving averages below providing support. Although China's inventory currently stays high, the recent continuous decline in TCs has provided bottom support for zinc prices, and SHFE zinc continues to hover at highs.

Data source disclaimer: Data other than publicly available information is derived from public information, market communication, and SMM's internal database models, processed by SMM for reference only and does not constitute decision-making advice.