Fundamental Support Weakens, Zinc Prices Fluctuate Downward [SMM Zinc Price Weekly Review]

Published: Feb 28, 2025 16:16

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[Fundamental Support Weakens, Zinc Prices Fluctuate Downward] On the macro level, tariff tensions have resurfaced. The US imposed a 25% tariff on Mexico and Canada on March 4, while also imposing a cumulative 20% tariff domestically. Meanwhile, the US initial jobless claims for the week recorded 242,000, the highest since the week of December 7, 2024...

SMM February 28 News:
Prices: On the macro side, tariff tensions have resurfaced. The US is set to impose a 25% tariff on Mexico and Canada on March 4, while a cumulative 20% tariff has been imposed domestically. Meanwhile, US initial jobless claims for the week recorded 242,000, the highest since the week of December 7, 2024. Additionally, the US January Pending Home Sales Index fell to a record low, and the February Services PMI preliminary reading was 49.7, significantly below expectations. Coupled with a sharp decline in US stocks, overseas macro sentiment weakened.

Fundamentals side, March TC accelerated upward to over 3,000 yuan/mt (metal content). Smelters had sufficient raw material inventory, combined with rising sulphuric acid prices and profits from sulphuric acid and by-products, enabling some smelters to achieve slight profitability. March production continued to recover upward, weakening supply-side support. On the consumption side, although consumption is currently in a recovery phase, the performance of actual new orders overall fell short of expectations, and the recovery in consumption still requires time to materialize. However, with zinc prices declining, downstream restocking increased on dips, and social inventory at low levels saw a slight destocking again, providing bottom support for zinc prices.

Overall, considering weak macro sentiment and the release of incremental supply, zinc prices are expected to fluctuate downward.

(The above information is based on market communication and comprehensive evaluation by the SMM research team. The information provided herein is for reference only and does not constitute direct investment research advice. Clients should make prudent decisions and not replace independent judgment with this information. Any decisions made by clients are unrelated to SMM.)

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Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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