US ADP employment data shows a surprise cold performance, SHFE and LME zinc prices maintain fluctuating trend [SMM Market Review - Weekly Price Review]

LME Zinc: At the beginning of the week, LME zinc maintained the fluctuating trend of the previous week. Subsequently, due to renewed tensions between the US and Canada over tariff issues, the market was filled with nervous sentiment, prompting some investors to take profits and exit the market, causing LME zinc to pull back from its highs. Then, Trump's "Big and Beautiful Act" was passed in the Senate, and with the July 9 deadline for the suspension of trade tariffs approaching, market risk aversion increased. However, the US dollar index first fell and then rose, and LME zinc maintained a fluctuating trend. Subsequently, US JOLTs job openings in May unexpectedly rose to the highest level since November last year, with the labour market remaining stable, reducing market expectations for an interest rate cut, and LME zinc dropped back slightly. Then, the market was relatively optimistic about the subsequent "US ADP employment data", and LME zinc maintained a brief fluctuating trend while waiting. Subsequently, the US June ADP employment figure was recorded at -33,000, the largest decline since March 2023, increasing market expectations for multiple interest rate cuts by the US Fed this year, and LME zinc continued to rise. Subsequently, the market continued to wait for the upcoming June seasonally adjusted non-farm payrolls data, and LME zinc maintained a fluctuating trend. As of 15:00 on Thursday this week, LME zinc was recorded at $2,746.5/mt, down $32/mt, or 1.15%.

SHFE Zinc: At the beginning of the week, SHFE zinc declined slightly. Subsequently, driven by LME zinc, SHFE zinc rose slightly. Then, affected by recent tariff disruptions between the US and Canada, SHFE zinc opened lower with a gap under the influence of LME zinc. Subsequently, China's final official manufacturing PMI for June was recorded at 49.7, higher than the previous value and in line with expectations, boosting market confidence to a certain extent. However, downstream consumption remained in the doldrums in the near term, so SHFE zinc maintained a fluctuating trend. Subsequently, SHFE zinc declined rapidly again under the influence of LME zinc. However, market confidence was continuously boosted by the excellent performance of the June Caixin manufacturing PMI, and SHFE zinc stopped falling and rose. Then, under the influence of a widening supply in the domestic fundamental situation and sluggish downstream consumption, SHFE zinc fluctuated. The US June "US ADP employment data" performed worse than expected, with the largest decline since March 2023, increasing market risk aversion, and SHFE zinc continued to rise. Subsequently, as market risk aversion gradually dissipated, SHFE zinc declined. Then, SHFE zinc rose slightly. As of 15:00 on Thursday this week, SHFE zinc was recorded at 22,325 yuan/mt, down 85 yuan/mt, or 0.38%.

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