With weak supply and improved demand, zinc prices are expected to fluctuate at highs

Macroscopically, the US Fed announced rate cut of 50 basis points. At the same time, the Fed tightened future rate cut expectations, aiming for a soft economic landing through preventive rate cuts. The market generally reacted with the positive news being fully priced in, leading to a brief correction in non-ferrous metals before they returned to fluctuating at highs. Additionally, the Fed's unexpected rate cut triggered a significant reduction in domestic LPR and existing mortgage rates, attracting bullish funds and driving zinc prices upward. Fundamentals side, the supply side saw little overall change. Although there are expectations of increased supply from mines in the long term, short-term shortages are hard to alleviate. TC remained low, so domestic smelters are unlikely to see significant increases in September. Consumption is in the traditional peak season, and although the "September peak season" has not materialized, consumption has improved MoM. Attention should be paid to downstream restocking demand before the National Day and the expected consumption peak in October. In China’s domestic spot market, with the previous price ratio correction, the inflow of imported zinc ingots increased. Although they were mainly sent directly to downstream, this somewhat alleviated the tight domestic spot situation. Spot premiums fluctuated downward, but considering the limitations on the delivery and long-term contracts of imported zinc ingots, a significant drop in domestic spot premiums is unlikely. Overall, with weak supply and improved demand MoM, zinc prices are expected to fluctuate at highs.