This week, the fundamental and macro fronts resonated, with SHFE and LME zinc prices maintaining a fluctuating trend [SMM Market Review - Weekly Price Review]

LME Zinc: At the beginning of the week, influenced by ongoing market uncertainties, LME zinc continued its fluctuating trend from the previous week. Subsequently, Moody's downgraded the US credit rating from Aaa to Aa, ending its highest rating for the US since 1917, which heightened market concerns. At the same time, Bostic reiterated his preference for one interest rate cut this year, leading LME zinc to decline amid sentiment-driven and low interest rate cut expectations. Then, the continuously decreasing overseas zinc inventories provided some support to the bottom of LME zinc prices. The market also anticipated the upcoming talks between the US and Japan, coupled with a slight weakening of the US dollar index, causing LME zinc to rise accordingly. However, the weak demand for the 20-year US Treasury bond auction led to a relatively bleak outcome, which increased market concerns about the economy. Meanwhile, overseas inventories increased somewhat, causing LME zinc to decline amid the resonance of macro and fundamental factors. Subsequently, LME zinc maintained a fluctuating trend. This week, LME zinc maintained a fluctuating trend. As of 15:00 on Thursday this week, LME zinc closed at $2,679.5/mt, down $6.5/mt or 0.24%.

SHFE Zinc: At the beginning of the week, according to SMM data, domestic inventories decreased to 83,800 mt. Meanwhile, downstream consumption improved slightly in the near term, and SHFE zinc continued its fluctuating trend from the previous week. Subsequently, according to customs data, China's zinc concentrate imports surged in April, with a YoY increase of up to 72.07%, maintaining expectations for a loose supply side. At the same time, some end-user export orders that had stalled due to overseas tariff barriers and other reasons in the early stage recently warmed up amid tariff easing, and SHFE zinc continued to maintain a fluctuating trend. Then, driven by the LME market, SHFE zinc opened higher and maintained a fluctuating trend. However, the relatively weak demand for the 20-year US Treasury bond auction led SHFE zinc to open lower with a gap. Subsequently, due to the relatively stable fundamental situation, SHFE zinc continued to maintain a fluctuating trend. This week, SHFE zinc maintained a fluctuating trend. As of 15:00 on Thursday this week, SHFE zinc closed at 22,455 yuan/mt, down 45 yuan/mt or 0.20%.

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