SHFE and LME Zinc Prices Both Closed Higher Last Week

LME zinc: At the beginning of last week, the US debt ceiling agreement eased market concerns. But the strong US dollar index and the Eurozone Sentix Investor Confidence index in June falling short of expectations and dropping 17 kept LME zinc prices at low levels. The ISM non-manufacturing index in the United States unexpectedly fell to 50.3 in May, which may ease inflation.

The improvement in market sentiment drove LME zinc prices to rebound. In the second half of the week, interest rate hike by Bank of Canada raised market expectations over a Fed rate hike in June, weighing on nonferrous metals prices. The number of initial jobless claims in the United States in the week of June 3 exceeded expectations and recorded 261,000. The US dollar index thus weakened significantly and LME zinc prices remained rangebound. As of last Friday, LME zinc prices closed at $2,387.5/mt, up $86.5/mt or 3.76% on the week.

SHFE zinc: SMM’s refined zinc output in May was 564,500 mt, and is estimated at a high level of 535,900 mt in June. The weak fundamentals weighed on SHFE zinc prices before improved market sentiment kept SHFE zinc prices rangebound.

SHFE zinc prices which had dropped for an extended period to the break-even point of smelters and the lowest in two years rebounded on the back of strong bulls. Spot trades were quiet. This, combined with continuous inflows of imported zinc ingots, kept zinc prices rangebound.  As of 15: 00 CST last Friday, SHFE zinc prices closed at 19,965 yuan/mt, with a weekly increase of 665 yuan/mt or 3.45%.