Interest Rate Cut Expectations and Data Fluctuations Drove SHFE and LME Center Up This Week [SMM Market Review - Weekly Price Commentary]

LME Zinc: At the beginning of the week, as the US PCE data met expectations, market expectations for a September interest rate cut increased. The US dollar index declined amid rising bets on a US Fed rate cut and concerns over its independence, supporting an upward move in LME zinc. Subsequently, the market awaited the August manufacturing PMI data, and LME zinc edged lower amid tense anticipation. However, the final result fell below expectations, boosting rate cut expectations, coupled with continued declines in overseas inventories, driving LME zinc higher. Later, LME zinc pulled back slightly. As the US dollar index stabilized and rebounded, it exerted some pressure on LME zinc, which continued to trend lower. Then, the US August ADP employment data came in below expectations, while initial jobless claims rose more than expected to 237,000, the highest level since June, fueling market risk-off sentiment. Meanwhile, the US Fed's Williams softened his stance on rate cuts, prompting LME zinc to rise. As of 15:00 Friday, LME zinc settled at $2,859.5/mt, up $45.5/mt, a gain of 1.62%.

SHFE Zinc: At the start of the week, SHFE zinc continued its fluctuating trend from the previous week. Subsequently, on the macro front, China's August manufacturing PMI rose, spreading positive market sentiment. Meanwhile, on the fundamentals side, LME inventories continued to decline, and new maintenance at domestic smelters increased, with production expected to decrease, driving SHFE zinc higher. However, according to SMM data, as of Monday, zinc inventories across seven major regions in China rose to 146,300 mt, leading SHFE zinc to decline. Later, heightened overseas rate cut expectations lifted LME zinc, which in turn supported SHFE zinc's rebound. However, domestic fundamentals remained weak, with supply outstripping demand, and some downstream players maintained cautious views on future consumption, causing SHFE zinc to trend lower. Subsequently, SMM data showed domestic zinc inventories rose again to 148,900 mt, but overseas inventories remained low, keeping SHFE zinc in a fluctuating trend. Later, driven by LME zinc's gains, SHFE zinc climbed steadily. As of 15:00 Friday, SHFE zinc settled at 22,155 yuan/mt, up 15 yuan/mt, a gain of 0.07%.