Interest Rate Cut Expectations Continue to Heat Up, SHFE and LME Zinc Price Center Rises [SMM Market Review - Weekly Price Commentary]

       LME Zinc: At the beginning of the week, the market continued to digest the US non-farm payrolls data that fell far below expectations, and LME zinc maintained its fluctuating trend from last Friday. Subsequently, affected by ongoing regional disputes internationally, LME zinc came under pressure and pulled back slightly. Then, as the US significantly revised down its non-farm payrolls data, market expectations for an interest rate cut increased significantly, and LME zinc stopped falling and rebounded. After that, although the US August CPI data performed well, the previously released PPI data fell short of expectations, coupled with a surge in initial jobless claims released later. Both factors reinforced the market's expectation of a US Fed interest rate cut. The US dollar index continued to decline, while LME zinc inventories kept decreasing, providing fundamental support for zinc prices. The combination of fundamentals and macro factors jointly drove LME zinc to continue rising. As of 15:00 this Friday, LME zinc was recorded at $2,916/mt, up $58.5/mt, an increase of 2.05%.

       SHFE Zinc: At the beginning of the week, SHFE zinc rose slightly. However, according to SMM data, as of September 8, domestic zinc inventories increased to 152,100 mt. Meanwhile, downstream consumption showed an underperforming peak season, which put pressure on SHFE zinc. Nevertheless, low overseas inventories still provided support at the bottom of prices, and SHFE zinc maintained a fluctuating trend. Subsequently, affected by ongoing regional disputes internationally, both SHFE and LME saw a slight pullback. Then, from a macro perspective, overseas PPI data fell short of expectations, and initial jobless claims continued to rise. Both factors increased investors' expectations for an interest rate cut. The US dollar index continued to pull back due to the data. From a fundamental perspective, although domestic inventories kept increasing, downstream consumption remained average, while low overseas inventories still provided some support for prices. The center of SHFE zinc moved upward. As of 15:00 this Friday, SHFE zinc was recorded at 22,305 yuan/mt, up 150 yuan/mt, an increase of 0.68%.