Interest rate cut expectations kept changing, zinc price center moved downward this week [SMM Market Review - Weekly Price Commentary]

LME zinc: At the beginning of the week, it edged higher due to the continued weakness in the US dollar sentiment; subsequently, the release of the July meeting minutes by the US Fed, which had a hawkish tone, with most officials supporting a delay in interest rate cuts, led to a rebound in the US dollar index, putting pressure on the metal market and causing LME zinc to pull back. Mid-week, LME zinc inventory decreased again, and the expectation of tight supply supported zinc prices to stabilize at low levels and edge up slightly. Then, the preliminary reading of the US August Markit Manufacturing PMI exceeded expectations, showing economic resilience, reducing the urgency for an interest rate cut, and the US dollar strengthened again. LME zinc lacked upward momentum and, under the strong pressure from the US dollar and the solid support from low inventory, turned into sideways movement. Subsequently, the market was anxiously awaiting signals from Powell at the Jackson Hole Global Central Bank Conference, and investor attitudes became cautious. However, the persistent low inventory pattern continued to provide bottom support for zinc prices, and LME zinc maintained a fluctuate rangebound trend. As of 3:00 pm on Friday this week, LME zinc was recorded at $2,769/mt, down $27.5/mt, a decrease of 0.98%.

SHFE zinc: At the beginning of the week, according to SMM data, as of Monday, domestic inventory in seven locations increased to over 130,000 mt, reaching a new high within five months. The domestic supply side saw capacity release, while downstream consumption was relatively weak, providing insufficient support for zinc prices, leading SHFE zinc to continuously pull back. However, overseas low inventory still supported the LME, and under its influence, there was still some support at the bottom for SHFE zinc, resulting in continuous fluctuating trend. Subsequently, SHFE zinc opened higher with a gap, driven by the LME. According to SMM data, as of Thursday, domestic social inventory in seven locations decreased slightly, and lower prices improved spot market transactions during the week, providing some support for zinc price movements. However, actual consumption still showed off-season characteristics, and SHFE zinc maintained a fluctuating trend. Under the dominance of the fundamental logic of strong supply and weak demand, the center of SHFE zinc continued to edge down slightly. As of 3:00 pm on Friday this week, SHFE zinc was recorded at 22,275 yuan/mt, down 255 yuan/mt, a decrease of 1.13%.