Geopolitical Disruptions Combined with Trade Disturbances Drive SHFE and LME Prices Higher [SMM Market Review - Zinc Price Weekly Commentary]

LME zinc: At the beginning of the week, LME zinc was closed due to the UK bank holiday; subsequently, signs that the US-Iran ceasefire agreement remained in effect eased inflation concerns and upward pressure on interest rates, which, combined with supply disruptions outside China, jointly supported LME zinc's rise; meanwhile, the continuously declining US dollar index and successive drops in inventories outside China further supported LME zinc's upward movement; then, although Trump expressed optimism about reaching a deal multiple times, he simultaneously threatened to resume bombing, causing market sentiment to deteriorate and the LME zinc price center to pull back slightly; later, Trump extended the deadline for the EU to approve a tariff agreement, and the market expected the US and Iran to reach a temporary ceasefire agreement, with geopolitical and trade sentiment resonating together to push LME zinc higher; afterwards, LME zinc moved sideways. As of 15:00 this Friday, LME zinc was recorded at $2,713.5/mt, up $113/mt, a gain of 3.38%.

SHFE zinc: At the beginning of the week, SHFE zinc was closed due to China's Labour Day holiday; subsequently, driven by expectations of easing US-Iran relations and supply disruptions outside China, SHFE zinc rose rapidly; however, after the holiday, rising domestic inventory combined with mediocre performance in downstream consumption and sluggish trading in the spot market left zinc prices lacking upward momentum, maintaining a fluctuating trend; nevertheless, the persistent tightness in ore supply continued to provide bottom support for SHFE zinc from the raw material side, pushing futures slightly higher; later, driven by LME, SHFE zinc opened higher with a gap, but insufficient support from the consumption side, combined with domestic inventory that, despite declining, remained at elevated levels, led SHFE zinc to drift lower gradually. As of 15:00 this Friday, SHFE zinc was recorded at 24,275 yuan/mt, up 630 yuan/mt, a gain of 2.66%.