Multiple Disturbances Weighed on Zinc Prices, with SHFE and LME Centers Moving Lower Throughout the Week [SMM Market Review - Zinc Price Weekly]

LME zinc: At the start of the week, prospects for a preliminary US-Iran peace deal lifted market optimism, sending LME zinc higher in choppy trade. Subsequently, heightened expectations for US Fed interest rate hikes dragged global equities and base metals lower, the US dollar index strengthened, and LME zinc continued to pull back. Strong wait-and-see sentiment then set in, and with a slight destocking in overseas zinc inventory, LME zinc stopped falling and moved sideways. Later, a persistently stronger US dollar and the reopening of the Strait of Hormuz kept base metals in the doldrums, pulling the LME zinc center lower. The US May PCE data then came in broadly in line with expectations, and as the market digested the figures, LME zinc maintained a fluctuating trend. The market, however, failed to shake off inflation worries and rate hike expectations, causing LME zinc to pull back once more. Afterwards, LME zinc modestly recovered some of its losses. As of 15:00 this Friday, LME zinc recorded $3,418.5/mt, down $136.5/mt, a decline of 3.84%.

SHFE zinc: At the start of the week, pressure from high domestic inventories nudged SHFE zinc lower. Optimism over easing Middle East tensions then drove SHFE zinc to follow LME gains and open higher with a gap. But with domestic downstream zinc consumption in the off-season and LME prices trending steadily lower, bottom support was insufficient and the price center kept slipping. As LME zinc stopped falling and stabilized, SHFE zinc also maintained a fluctuating trend amid SHFE-LME interplay. Subsequently, a stronger US dollar and the reopening of the Strait of Hormuz sent SHFE zinc opening lower with a gap. SMM data then showed a continued rise in domestic zinc ingot inventories, creating strong overhead resistance that repeatedly dragged SHFE zinc lower. Towards the week's end, SHFE zinc recovered losses and edged up. As of 15:00 this Friday, SHFE zinc recorded 23,945 yuan/mt, down 875 yuan/mt, a decline of 3.53%.