Tariff "Heavy Blow" Combined with Domestic Positive Signals, Zinc Prices Maintained Fluctuating Trend This Week [SMM Market Review - Weekly Price Commentary]

SMM February 21 News:

LME Zinc: At the beginning of the week, due to the US "terrifying data" showing a January retail sales month-on-month rate of -0.9%, the largest decline since January last year, and US Fed's Harker stating that the current economic situation supports temporarily maintaining policy stability, coupled with the US February NAHB Housing Market Index falling below expectations, LME zinc fluctuated upward. Subsequently, Trump announced a "heavy-handed" tariff policy, imposing approximately 25% tariffs on automobiles and chips. The US dollar index fluctuated upward throughout the day, stabilizing at the 107 level, leading to a slight pullback in LME zinc. Later, as the US January annualized total housing starts fell below the expected 1.39 million units, recording 1.366 million units, and overseas zinc ingot inventories continued to decline, providing bottom support for LME zinc. Additionally, the release of favorable macro policies in China drove LME zinc to fluctuate upward. This week, the overall center of LME zinc moved higher. As of 16:00 on Thursday, LME zinc recorded $2,916.5/mt, up $78/mt, an increase of 2.75%.

SHFE Zinc: At the beginning of the week, according to SMM data, domestic zinc ingot inventory on Monday (February 17) increased by 12,300 mt compared to February 13, showing a slight inventory buildup. However, driven by positive market sentiment and the influence of the overseas futures market, SHFE zinc rose slightly. Subsequently, the National Development and Reform Commission (NDRC) stated its support for private enterprises to actively participate in the "implementation of major national strategies and the development of security capabilities in key areas" and the "program of large-scale equipment upgrades and consumer goods trade-ins." Meanwhile, PBOC Governor Pan Gongsheng indicated the implementation of more proactive fiscal policies and moderately loose monetary policies. Although domestic favorable policies were released, downstream overall consumption showed no significant highlights and remained relatively weak, with SHFE zinc maintaining a fluctuating trend. Later, SMM communication revealed that as of Thursday (February 20), the total zinc ingot inventory across seven regions monitored by SMM increased slightly by 1,500 mt compared to February 17. As consumption improved, the inventory growth gradually slowed, and the market digested domestic favorable news, leading SHFE zinc to rise slightly. As of 15:00 on Thursday, SHFE zinc recorded 24,145 yuan/mt, up 40 yuan/mt, an increase of 0.17%.

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