Domestic and Overseas Inventories Continued to Diverge, SHFE and LME Zinc Prices Fluctuated Considerably [SMM Market Review - Weekly Price Commentary]

LME Zinc: At the beginning of the week, LME zinc was closed for one day due to the Summer Bank Holiday, then continued its fluctuating trend from the previous week. Subsequently, the US dollar index rebounded, leading to a slight decline in LME zinc. However, influenced by recent US Fed developments, the US dollar index continuously pulled back, driving LME zinc higher. Later, the US August Conference Board Consumer Confidence Index exceeded expectations, easing market risk-off sentiment, while international tariff disturbances continued to disrupt the market, causing LME zinc's center to decline. Nevertheless, the continuous decline in LME zinc inventory recently provided bottom support for zinc prices, allowing LME zinc to stop falling and stabilize, maintaining a fluctuating trend. Subsequently, as the market assessed threats to the US Fed's independence, the US dollar index declined, and initial jobless claims came in below expectations, indicating resilience in the labour market. The positive market sentiment drove zinc prices higher. Later, the market awaited the July PCE data and August Consumer Confidence Index, keeping LME zinc in a fluctuating trend. Finally, US Fed Governor Waller reiterated calls for an interest rate cut, pushing zinc prices up. As of 15:00 Friday, LME zinc stood at $2,792.5/mt, down $13/mt, a decline of 0.46%.

SHFE Zinc: At the beginning of the week, SHFE zinc continued its fluctuating trend from the previous week. Later, according to SMM data, as of Monday (August 25), SMM's zinc ingot inventory across seven regions increased to 138,500 mt, with relatively loose domestic supply, putting downward pressure on SHFE zinc. Although domestic social inventory continued to rise, overseas zinc inventories kept decreasing, coupled with signs of recovery in downstream consumption in certain domestic sectors, SHFE zinc maintained its fluctuating trend. Subsequently, influenced by the LME, SHFE zinc opened higher with a gap. Later, under the divergent effects of domestic and overseas inventories, SHFE zinc fluctuated. However, as the LME declined due to the better-than-expected US August Conference Board Consumer Confidence Index and ongoing tariff disruptions, SHFE zinc opened lower with a gap. Despite domestic inventories rising further to over 140,000 mt, spot market trading improved, and overseas inventories gradually fell below 60,000 mt, keeping SHFE zinc in a fluctuating trend. As of 15:00 Friday, SHFE zinc stood at 22,140 yuan/mt, down 135 yuan/mt, a decline of 0.61%.