Overnight, LME zinc opened at $2,760/mt. During the initial trading session, a tug-of-war between longs and shorts caused LME zinc to oscillate around the daily average line. During the European trading session, bears took the upper hand, pushing the center of LME zinc down to $2,715/mt. Entering the night session, it rebounded back near the daily average line, eventually closing down at $2,726/mt, down $35.5/mt or 1.29%. Trading volume decreased to 12,734 lots, while open interest increased by 1,548 lots to 225,000 lots. Overnight, LME zinc stopped rising and started to fall, with the 60-day moving average acting as resistance above and the 40-day moving average providing support below. The growth rate of US retail sales in April slowed down, and the monthly PPI rate unexpectedly declined, indicating weak economic data. The earlier optimism due to the easing of trade tariffs faded somewhat, providing an opportunity for bears to enter the market, and LME zinc was in the doldrums.
Overnight, the most-traded SHFE zinc 2506 contract opened lower with a gap at 22,490 yuan/mt. After dipping to 22,440 yuan/mt in the initial trading session, bears took profits and exited the market, causing SHFE zinc to rise steadily, with the center moving up to 22,575 yuan/mt. It eventually closed up at 22,595 yuan/mt, up 145 yuan/mt or 0.64%. Trading volume decreased to 57,656 lots, while open interest decreased by 2,645 lots to 96,405 lots. Overnight, SHFE zinc recorded a small bullish candlestick, but the center of the daily candlestick moved down, and the KDJ indicator narrowed. Due to the influx of imported zinc ingots, as well as the impact of high zinc prices and the off-season, downstream buyers were cautious about purchasing at high prices, leading to an accumulation of social inventory. Meanwhile, as some smelters approached the end of their maintenance periods, expectations for an increase in supply rose, causing zinc prices to jump initially and then pull back.
