Market Bullish and Bearish Factors Intertwined, Zinc Prices on Both SHFE and LME Decline [SMM Market Review - Weekly Price Commentary]

       LME Zinc: At the beginning of the week, due to uncertainties in international trade, market risk aversion sentiment persisted. At the same time, expectations for US Fed interest rate cuts intensified, coupled with continued declines in overseas zinc inventory, the LME zinc backwardation structure widened significantly, providing strong support for LME zinc. However, a strengthening US dollar index capped zinc prices, and LME zinc overall maintained a fluctuating trend. Subsequently, LME zinc inventory increased to 38,600 mt; although still at low levels, trade concerns affected the market, and some capital outflows dragged the center of LME zinc lower. Then, the US September NFIB Small Business Optimism Index unexpectedly fell to 98.8, increasing market uncertainty and boosting risk aversion sentiment, leading LME zinc to edge higher. Later, from a macro perspective, US Fed officials continued to call for interest rate cuts, regional geopolitical uncertainties remained, and a blow-up in the US credit market further fueled risk aversion sentiment. From a fundamental perspective, overseas zinc inventory remained at low levels; under the influence of multiple factors, LME zinc gradually moved higher. As of Friday 15:00, LME zinc recorded $2,948.5/mt, down $36.5/mt, a decrease of 1.22%.

        SHFE Zinc: At the beginning of the week, SHFE zinc rose quickly driven by the external market. Subsequently, according to SMM statistics, as of Monday (October 13), domestic social inventory increased to over 160,000 mt, spot market performance was loose, and inventory gradually built up, exerting some pressure on zinc price increases. However, low overseas inventory provided some support to the bottom of zinc prices, and SHFE zinc maintained a fluctuating trend. Later, affected by recent tariff news, market trade concerns were significant, and coupled with the drag from the external market's decline, SHFE zinc opened lower with a gap. Then, China's September CPI fell 0.3% YoY but rose 0.1% MoM; the consumer market operated generally steadily. Meanwhile, according to central bank data, the increase in social financing scale in the first three quarters was 30.09 trillion yuan, 442 billion yuan more than the same period last year, indicating strong fiscal support. Market sentiment recovered, but under conditions of strong supply and weak demand, SHFE zinc continued its fluctuating trend. Subsequently, as positive macro sentiment gradually digested, SHFE zinc moved lower. As of Friday 15:00, SHFE zinc recorded 21,815 yuan/mt, down 455 yuan/mt, a decrease of 2.04%.