Geopolitical Risks Dominate Market, SHFE and LME Both Decline [SMM Market Review - Zinc Weekly Review]

Published: Jun 12, 2026 15:42

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[Geopolitical Risks Dominate Market, SHFE and LME Both Move Lower] At the start of the week, the situation in the Middle East remained volatile, and LME zinc fluctuated; subsequently, the US dollar index declined, and LME zinc rose; however, as market expectations for the US Fed to maintain higher interest rates for longer intensified and the US struck Iran, the center of LME zinc shifted lower; then, Trump announced the resumption of “heavy strikes” against Iran, the US-Iran ceasefire agreement was disrupted, and LME zinc quickly moved lower...

LME Zinc: At the start of the week, LME zinc fluctuated as the Middle East situation shifted, then rose as the US dollar index fell. However, the LME zinc price center declined amid rising market expectations that the US Fed would maintain higher interest rates for longer and the US strikes on Iran. LME zinc then dropped rapidly after Trump announced a resumption of "forceful strikes" on Iran, casting doubt on the US-Iran ceasefire deal. But later, Trump said he had canceled the strike plan that night and that the deal with Iran had entered the final stage of finalisation, which led to a recovery in market sentiment and pushed LME zinc higher. LME zinc then maintained a fluctuating trend due to lingering market uncertainty. As of 15:00 this Friday, LME zinc settled at $3,522/mt, down $18.5/mt, a decline of 0.52%. SHFE Zinc: At the start of the week, SHFE zinc maintained the fluctuating trend from the previous week, and then opened higher with a gap, driven by the rise on the LME. However, China's social inventory persisted at high levels, putting a cap on prices, and coupled with escalating tensions in the Middle East, these multiple factors weighed on SHFE zinc, pushing it lower. Yet, negative ore TCs in China provided some bottom support for prices. On Thursday, China's social inventory saw a slight destocking, and Trump began to release some positive news on the Middle East issue, helping SHFE zinc recover some of its losses and fluctuate upward. As of 15:00 this Friday, SHFE zinc recorded 24,360 yuan/mt, down 420 yuan/mt, a decline of 1.69%.

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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