SHFE/LME Price Ratio Declined to 6.7 and Consolidated Near That Level, Export Window Opens [SMM Zinc SHFE/LME Price Ratio Weekly Review]

SMM August 21: This week, the SHFE/LME price ratio dropped to around 6.7, and the zinc ingot export window opened. Outside China, US-Iran negotiations stalled, the US Treasury repurchased long-term bonds, the US dollar index and US Treasury yields weakened, and non-ferrous metals rebounded overall. On the fundamentals side, LME inventory remained below 100,000 mt, the 0-3 backwardation structure expanded to over $130/mt, overseas zinc spot cargo was tight, and LME zinc performed strongly. In China, ore supply tightness continued, TCs maintained at lows, but in the consumption off-season, downstream players were wary of high prices and restrained procurement, zinc ingot social inventory increased, and SHFE zinc performed weaker relative to LME zinc. Overall, the SHFE/LME price ratio is expected to consolidate at lows, with subsequent attention on inventories outside China and changes in the relative strength of SHFE and LME.