US dollar pressure combined with macro interference led to a downward shift in the center of zinc prices on both SHFE and LME this week [SMM Market Review - Weekly Price Review]

LME zinc: At the beginning of the week, due to the recent cooling of market expectations for an interest rate cut this month, coupled with the fact that the US June durable goods orders monthly rate exceeded both the expected and previous values last Friday, indicating continued economic resilience, the US dollar index rose continuously, and LME zinc prices fell. Subsequently, as the market awaited the results of a new round of Sino-US trade negotiations and the US Fed's interest rate decision, investors remained cautious, and LME zinc maintained a fluctuating trend. However, overseas inventories continued to decline, remaining at a relatively low level, providing support for LME zinc, which rose slightly. Then, the US July ADP employment figure recorded the highest growth rate since March, with Q2 economic growth at 3%, demonstrating strong economic data. Meanwhile, the US Fed continued to hold off on interest rate cuts, maintaining a wait-and-see approach, causing the US dollar index to rise continuously and LME zinc prices to fall. Additionally, the unexpected rebound in the US June core PCE inflation led the US dollar index to stand above the 100 mark for the first time in two months, while uncertainties regarding tariffs also persisted. Under the influence of US dollar pressure and tariff uncertainties, LME zinc continued to decline. As of 15:00 this Friday, LME zinc closed at $2,755/mt, down $74/mt or 2.62%.

SHFE zinc: At the beginning of the week, according to SMM data, domestic inventories in seven regions continued to build up, and downstream consumption remained in the doldrums. However, the positive sentiment in the domestic market had not been fully digested, providing some support for zinc prices, and SHFE zinc maintained a fluctuating trend. Subsequently, from a macro perspective, the market continued to anticipate the results of Sino-US negotiations, while the domestic fundamental situation of strong supply and weak demand persisted. Meanwhile, ferrous metals prices began to rise. Under the influence of multiple factors, SHFE zinc continued to maintain a fluctuating trend. Regarding Sino-US tariffs, the two countries will continue to promote the 90-day extension of the 24% portion of the US reciprocal tariff that has been suspended, as well as China's retaliatory measures. Meanwhile, as the domestic positive sentiment was gradually digested, SHFE zinc fell slightly. Then, due to the unexpected rebound in the US June core PCE inflation, the US dollar index rose continuously, and the center of LME zinc prices fell somewhat, dragging SHFE zinc down rapidly. Subsequently, as SMM social inventories declined slightly and downstream purchasing sentiment recovered, SHFE zinc stopped falling and stabilized, maintaining a fluctuating trend. SMM predicts that domestic refined zinc production may continue to increase in August, and the fluctuating trend of SHFE zinc will remain unchanged under unchanged fundamental conditions. As of 15:00 this Friday, SHFE zinc closed at 22,320 yuan/mt, down 565 yuan/mt or 2.47%.