LME zinc prices: The US factory orders in February was 1.4%, higher than expected. The US JOLTs job vacancies in February was higher than expected and stood at 8.756 million. The favourable macroeconomic environment pushed up LME zinc prices in early April; then, dovish remarks by Fed officials boosted the prices of nonferrous metals. Economic data in overseas markets performed strongly, and optimistic prospects of demand boosted macro sentiment. Bullish funds bolstered zinc prices. Subsequently, the US core CPI in March was higher than expected for the third consecutive month, defeating the market's expectations for the Fed's interest rate cut. The market expected that the interest rate cut may be delayed. LME zinc briefly fell but still fluctuated at a high level. As market sentiment calmed down, LME zinc briefly dropped. However, economic data from many European countries fell beyond expectations, and the unexpected cooling of the S&P Global Flash US Manufacturing PMI in April dragged down the US dollar. LME zinc prices rebounded. At the end of the month, non-farm payrolls in April were lower than market expectations and the previous reading, and the US job market showed signs of weakness. Market expectations for a Fed rate cut grew. LME zinc prices rose again.
SHFE zinc prices: At the beginning of April, TCs of zinc concentrate fell again, and the strong cost support of smelters bolstered SHFE zinc prices. In addition, China's Caixin Manufacturing PMI index in March recorded 51.1, which has been above 50 for consecutive months. The macro sentiment supported the continued upward trend of SHFE zinc prices. China continued to promote trade-ins of home appliances and automobiles to boost consumption. However, the continuous increase in SMM weekly inventory hit market confidence. Meanwhile, the high zinc price suppressed downstream consumption. SHFE zinc prices thus lacked upward momentum and moved rangebound at highs. At the end of the month, TCs of zinc concentrate continued to decline, and smelters cost underpinned zinc prices. In addition, the social inventories of zinc ingots were destocked before the Labour Day holiday, boosting market confidence. The market's bullish sentiment revived and that bolstered SHFE zinc prices again. SHFE zinc prices hit a nearly one-year high and remained at a high level.
China’s spot markets: In April, the premiums/discounts in the three market markets in China were weak, with an average discount of about 100 yuan/mt. In the first half of the month, there were continued inflows of imported zinc ingots. Inventories remained high. Downstream enterprises mainly purchased mainly on demand due to poor consumption. In this scenario, premiums/discounts were relatively weak. In the second half of the month, the premiums/discounts recovered slightly. Spot premiums/discounts in Tianjin rose from a low level as lower shipments of Xinzi zinc due to maintenance at the producer and an increase in direct shipments to downstream buyers led to low social inventories. Galvanising consumption performed well, and the premium was slightly firm. In Guangdong, a combination of maintenance and production cuts at Mengzi Mining & Metallurgy and Yunnan Luoping Zinc & Electricity as well as shipments arrivals hampered by high transportation costs in Yunnan prompted traders to raise prices. Thus, the premiums rose significantly at the end of the month. In May, the Shanghai premium bottomed out and rebounded quickly as higher profit of bills boosted purchases. But the high zinc price suppressed downstream purchasing enthusiasm, limiting the premium recovery. Meanwhile, as the warrants are being offered for sale after the delivery of the SHFE front-month contract, spot premiums/discounts are expected to remain weak; in Guangdong and Tianjin, traders raised prices amid low inventory of tradable cargoes, improving the premiums slightly. But with the poor downstream consumption and a large number of delivered cargoes, the premiums may still decline in the future.
![Zinc de Tianjin: Los precios del zinc repuntan, la demanda downstream se mantiene cautelosa [Comentario de mediodía de SMM]](https://imgqn.smm.cn/usercenter/tAyyp20251217171754.jpg)
