Domestic and overseas inventory changes vary, with SHFE and LME zinc prices fluctuating considerably [SMM Market Review - Weekly Price Review]

LME Zinc: At the beginning of the week, LME zinc continued its upward trend from the previous week. Then, Trump indicated that gold would not be subject to a tariff hike, leading to a slight improvement in market sentiment. Meanwhile, the market continued to await the US inflation report to gauge the prospects for an interest rate cut. The US dollar index rose from a low level, putting pressure on LME zinc, which then declined. However, in recent times, overseas inventories have continued to decline, providing support to the bottom of LME zinc prices, causing them to stop falling and rise. Subsequently, the US July unadjusted CPI annual rate showed only a mild increase in inflation, raising the probability of a US Fed interest rate cut next month. The US dollar index plummeted sharply, and LME zinc continued to rise. But under the influence of a higher-than-expected core CPI annual rate and continuously decreasing overseas inventories, LME zinc fluctuated. Then, the market gradually digested the positive sentiment brought about by tariff easing, and LME zinc pulled back slightly. After that, LME zinc inventories continued to decline, and the relatively low inventories still provided some support to zinc prices, causing LME zinc to rebound and rise. However, the US July PPI data recorded the largest increase in three years, and the US Fed's hawkish remarks continued, causing the US dollar index to rise. Investors remained on the sidelines, but the current relatively low inventories provided strong support to the bottom of zinc prices, and LME zinc maintained a fluctuating trend. As of 15:00 this Friday, LME zinc closed at $2,828.5/mt, up $4.5/mt, with a gain of 0.16%.

SHFE Zinc: At the beginning of the week, SHFE zinc also continued its upward trend from the previous week, rising slightly. Subsequently, according to SMM data, as of Monday this week, SMM's zinc ingot inventories in seven regions continued to increase to 119,200 mt. Affected by the continuously rising inventories, SHFE zinc declined slightly. Then, influenced by LME zinc, SHFE zinc opened lower with a gap. However, the continuous decline in overseas inventories drove LME zinc higher, and under the correlation between SHFE and LME zinc, SHFE zinc also rose continuously. Subsequently, influenced by the relatively mild performance of overseas data, expectations for a US Fed interest rate cut next month continued to rise. The rise in LME zinc caused SHFE zinc to open higher with a gap. However, the end-use demand in the domestic market still exhibited obvious seasonal off-season characteristics. Meanwhile, according to SMM communications, as of Thursday this week, SMM's zinc ingot inventories in seven regions continued to increase by 10,000 mt to 129,200 mt. Affected by relatively weak demand and continuously increasing inventories, SHFE zinc continued to decline. Then, although the domestic fundamental situation of strong supply and weak demand persisted, SHFE zinc maintained a fluctuating trend under the influence of LME zinc. As of 15:00 this Friday, SHFE zinc closed at 22,505 yuan/mt, down 10 yuan/mt, with a loss of 0.04%.