On Friday, the trading activity for the SHFE zinc 2607 contract began at 24,815 yuan per metric ton. During the initial stages, prices rose to a maximum of 24,870 yuan, but soon faced a correction as traders capitalized on profits . By day’s end, the contract had slid to a minimum of 24,640 yuan,closing at 24,695 yuan,representing a decline of 85 yuan, or 0.34%. Additionally, trading volume decreased to 59,844 lots,and open interest fell by 748 lots,ending at 96,892 lots.
In parallel, the LME saw its zinc trading commence at $3,594 per metric ton,with prices varying throughout the day. Initially, values were stable near $3,570, but an uptick followed, reaching as high as $3,602 during the overnight session. However, as bearish tendencies emerged and traders increased their positions, prices dropped to a low of $3,522.5. Ultimately,the session wrapped up with LME zinc showing a decrease of $54.5, or 1.52%, settling at $3,540. The trading volume surged to 11,703 lots, while open interest saw an increase of 3,251 lots to total 234,000 lots.
The influence of the recent US non-farm payrolls report was notable,revealing strong job growth and raising the likelihood of an impending interest rate hike by the US Federal Reserve later in year. This news bolstered value of the US dollar,putting additional pressure on nonferrous metals like zinc.
In China,weakening demand from end users added further strain on domestic zinc prices. Nonetheless, reduction in treatment charges for domestic zinc concentrates offered some degree of support for SHFE zinc,which helped mitigate losses. Consequently,analysts expect ongoing volatility in SHFE zinc pricing in the upcoming sessions.
Overall,trading on Friday resulted in a minor bearish candlestick formation for SHFE zinc, with 5- and 10-day moving averages serving as key resistance levels. The macroeconomic environment presents ongoing challenges for nonferrous metals,especially amid rising expectations for interest rate hikes and external market pressures.
