Macro Sentiment Improves, Zinc Prices Fluctuate at Highs [SMM Zinc Price Weekly Review]

SMM February 14 News:

Price: Macro side, Trump signed the reciprocal tariff memorandum, which is expected to be implemented after April 1, mitigating the impact of tariffs. Although US PPI data exceeded expectations, some sub-items indicated that core PCE fell short of expectations, easing inflation pressure. Domestically, the National Development and Reform Commission (NDRC) expanded the scope of trade-in policies for consumer goods, while the central bank's report emphasized the implementation of a "moderately loose" monetary policy, improving overall macro sentiment. Fundamentals side, the expectation of a loose mine supply continues, with weekly TC rising again to 2,750 yuan/mt (metal content). Against the backdrop of rising TC, smelter profits are gradually recovering. Coupled with profits from sulphuric acid and minor metal recovery, some smelters have already achieved slight profitability. Market predictions suggest that smelter production may further increase. According to SMM discussions, smelters are expected to show stronger willingness to increase production only when TC rises to above 3,000-3,500 yuan/mt (metal content). In the short term, the likelihood of a significant increase in smelter production remains low. On the consumption side, downstream enterprises have mostly resumed production after the Lantern Festival, but actual end-user performance indicates that consumption transmission still requires time, and overall resumption of work has fallen short of expectations. Overall, improved macro sentiment supports zinc prices, but rising TC and the pace of consumption recovery suppress zinc prices at high levels. Zinc prices are expected to have limited upside room.

(The above information is based on market discussions and comprehensive assessments by the SMM research team. The information provided herein is for reference only and does not constitute direct investment research advice. Clients should make prudent decisions and not replace independent judgment with this information. Any decisions made by clients are unrelated to SMM.)

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