Macro and Fundamentals Compete, Both SHFE and LME Prices Decline [SMM Market Review - Weekly Price Commentary]

       LME Zinc: At the beginning of the week, LME zinc's center shifted upward, boosted by optimism that the US government might end its shutdown. Subsequently, a slight increase in overseas zinc inventories eased expectations of tight supply, putting pressure on zinc prices and causing them to pull back. However, after the US government officially resumed operations, market focus was expected to shift to upcoming economic data and its impact on US Fed policy, leading to increased volatility in the US dollar index and causing LME zinc to fluctuate. The government restart then boosted market sentiment again, driving LME zinc higher. But continuous accumulation of overseas inventories weakened price support at the bottom, leading to a slight decline in LME zinc. As of 15:00 Friday, LME zinc was recorded at $3,027/mt, down $39.5/mt for the week, a decrease of 1.29%.

       SHFE Zinc: At the beginning of the week, SHFE zinc attempted to rise, driven by the external market. However, by Monday, domestic SMM zinc ingot inventories across seven regions increased slightly by 900 mt to 159,600 mt, coupled with mediocre consumption performance, causing zinc prices to lack sustained upward momentum and turn lower. Subsequently, although domestic spot consumption remained weak, the continued opening of the zinc ingot export window and expected lower smelter production jointly supported zinc prices, leading SHFE zinc into a period of fluctuation. Then, dragged down by a weaker external market, SHFE zinc declined again. Although SHFE zinc rebounded slightly on Thursday driven by a drop in inventories, it struggled to rise and turned lower due to the impact of the external market and domestic economic data falling short of expectations. As of 15:00 Friday, SHFE zinc was recorded at 22,425 yuan/mt, down 295 yuan/mt for the week, a decrease of 1.30%.