US Fed Cut Interest Rate as Expected, SHFE and LME Zinc Prices Declined [SMM Market Review - Weekly Price Commentary]

       LME Zinc: At the beginning of the week, LME zinc continued its upward trend from the previous week. Subsequently, continuous declines in LME zinc inventories, coupled with the US September New York Fed Manufacturing Index falling below expectations, heightened market risk aversion sentiment, supporting a rise in LME zinc. Then, despite the US August retail sales month-on-month exceeding expectations, market focus shifted to the outcome of the US Fed interest rate meeting and subsequent interest rate cut path. The US dollar index weakened, and LME zinc continued to rise. Later, the US Fed announced a 25 basis point interest rate cut as expected, but during the press conference, Powell referred to it as a risk management cut, with hawkish rhetoric. The US dollar index rebounded in response, and LME zinc came under pressure and declined. Subsequently, data showed that US initial jobless claims for the week were lower than previous values and expectations, marking the largest decline in nearly four years, indicating some recovery in the job market. However, LME zinc inventories continued to decline and fell below 50,000 mt. Amid intertwined bullish and bearish factors, LME zinc maintained a fluctuating trend. As of 15:00 this Friday, LME zinc recorded $2,920.5/mt, down $32.5/mt, a decrease of 1.20%.

  SHFE Zinc: At the beginning of the week, SHFE zinc continued its fluctuating trend. Subsequently, according to SMM data, as of this Monday, social inventories of zinc ingots in seven domestic regions increased to over 160,000 mt, while downstream consumption still showed no peak season characteristics. SHFE zinc encountered resistance to rising, but continuous declines in overseas inventories provided bottom support for zinc prices. Under resonance between SHFE and LME, SHFE zinc continued to fluctuate. Thereafter, influenced by domestic supply surplus and weak end-use consumption, SHFE zinc trended lower. After the US Fed announced the interest rate cut, Powell's hawkish stance increased uncertainty about subsequent policies, and weaker LME zinc prices led SHFE zinc to continue declining. Then, according to the latest SMM data, as of this Thursday, domestic social inventories slightly decreased by 2,100 mt to 158,500 mt. SHFE zinc stopped falling and stabilized, transitioning into a fluctuating trend. As of 15:00 this Friday, SHFE zinc recorded 22,045 yuan/mt, down 260 yuan/mt, a decrease of 1.17%.