[SMM Zinc Morning Review July 14] Positive Macro Sentiment Boosts Zinc Prices to Strengthen

Overnight, the U.S. June PPI fell more than expected, with the annual rate and monthly rate both recording 0.1%, with the annual rate the lowest in three years; the number of people filing for unemployment benefits unexpectedly fell last week to 237,000; San Francisco Fed President Daly said that now it is too early to declare that the inflation problem has been solved, enough steps must be taken to raise interest rates to a sufficiently tight level, and the Fed is currently expected to raise interest rates one or two times.

Federal Reserve Board member Waller said that he supports raising interest rates at the FOMC meeting in July, which gives some confidence of the U.S. inflation improvement, and the market lowered the peak interest rate pricing of the Bank of England to 6.25%, which was previously 6.5%. Traders are no longer fully pricing in yet another 50 basis point rate hike from the ECB. The rating agency Standard & Poor’s currently expects the Fed to suspend interest rate hikes until June next year, when the Fed is expected to start cutting interest rates; data from the General Administration of Customs shows that in the first half of the year, my country’s imports and exports of goods trade increased by 2.1% year-on-year, hitting a record high for the same period in history.

At present, the development of my country's foreign trade is generally stable. In the first half of the year, the total value of import and export of goods trade increased by more than 400 billion yuan year-on-year, and the scale exceeded 20 trillion yuan for the first time in the same period of history.

Overnight, LME Zinc opened at US$2,425/ton. After the opening, LME Zinc fluctuated all the way up, and then stabilized after a slight fall in the night session. It finally closed at US$2,475/ton, an increase of US$50.5/ton, an increase of 2.08%, and the trading volume increased. To 11,396 lots, the position increased by 2,215 hands to 187,000 hands. LME Zinc recorded a big positive column overnight, and the top broke through the upper track of Bollinger Road. LME inventories decreased by 400 tons to 71,750 tons, and LME inventories recorded a decrease.

Overnight, the SHFE Zinc main 2308 contract opened at 20,615 yuan/ton, and after the opening, it fluctuated around the daily moving average, and finally closed at 20,600 yuan/ton, up 245 yuan/ton, or 1.20%, and the trading volume decreased to 78,807 lots. Volume decreased by 3421 lots to 102,000 lots. SHFE Zinc recorded a cross star overnight, breaking through the upper track of Bollinger Road. The year-on-year growth rate of U.S. PPI in June was 0.1%, lower than the expected 0.4% and the previous value of 1.1%. The core PPI rose by 2.4% year-on-year, which was lower than the expected 2.6%. The market bulls were once again driven by the macro, which boosted the upward movement of the internal and external markets, and the internal and external markets were relatively strong.

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