Overnight, LME zinc opened at $3,050.5/mt. At the beginning of the session, a tug-of-war between longs and shorts caused LME zinc to fluctuate around the daily moving average. Approaching the European trading hours, it reached a high of $3,070/mt, but shorts launched a high-level attack, driving LME zinc sharply downward to a low of $3,015/mt. Subsequently, shorts took profits and exited, allowing LME zinc to recover upward, recording a V-shaped reversal. During the night session, the center returned to the daily moving average for consolidation, with a slight decline at the end of the session. It ultimately closed down at $3,036.5/mt, a decrease of $9.5/mt or 0.31%. Trading volume increased to 9,992 lots, and open interest rose by 1,572 lots to 234,000 lots. Overnight, LME zinc formed a bearish candlestick, with the 40-day moving average providing resistance above and the 5-day moving average offering support below. Overnight, LME inventory decreased by 4,400 mt to 262,100 mt, a drop of 1.65%, continuing its downward trend. US retail sales data exceeded expectations overnight, strengthening the US dollar and pressuring zinc prices. Additionally, the ratio of LME cancelled warrants slightly pulled back from high levels, and short funds increased, causing the center of LME zinc to dip slightly. Focus today will be on the US Fed monetary policy meeting decision.
Overnight, the most-traded SHFE zinc 2502 contract opened at 25,350 yuan/mt. At the beginning of the session, a tug-of-war between longs and shorts caused SHFE zinc to fluctuate rangebound around the daily moving average, with an amplitude of no more than 200 yuan/mt. Toward the end of the session, shorts increased positions, pushing SHFE zinc sharply downward to close at the intraday low of 25,235 yuan/mt, a decrease of 185 yuan/mt or 0.73%. Trading volume decreased to 34,951 lots, while open interest increased by 604 lots to 125,000 lots. Overnight, SHFE zinc recorded three consecutive bearish candlesticks, with the 5-day and 10-day moving averages providing resistance above, and the KDJ indicator expanding downward. As supply-side constraints ease, the tight supply-driven logic has begun to weaken. However, demand remains better-than-expected in the off-season, inventory is at a seasonal low, and spot premiums are fluctuating at highs. Zinc prices are expected to have limited downside room.
