Macro expectations combined with fundamental support, the zinc price center rose this week [SMM Market Review - Weekly Price Commentary]

       LME Zinc: At the beginning of the week, amid a tug-of-war between longs and shorts ahead of the US Fed interest rate cut, LME zinc maintained a fluctuating trend. Subsequently, the US November ISM manufacturing PMI fell short of expectations, and the US dollar index remained weak, supporting a rise in LME zinc. Then, the US dollar index declined following Trump's hints regarding the next US Fed chair candidate, providing solid support at the bottom for LME zinc. However, continued increases in overseas zinc inventory exerted some downward pressure, keeping LME zinc fluctuating. Later, although an unexpected "cool-down" in US November ADP employment data heightened market risk-off sentiment, the US November ISM non-manufacturing PMI ultimately exceeded expectations, and initial jobless claims for the week ending November 29 hit a three-year low, which somewhat alleviated risk-off sentiment, leading LME zinc to fluctuate lower. Subsequently, market expectations for a December interest rate cut remained above 80%, coupled with overseas zinc inventory increases still at low absolute levels, both factors helped LME zinc regain upward momentum. As of 15:00 Friday, LME zinc recorded $3,115/mt, up $64/mt, a gain of 2.1%.

       SHFE Zinc: Early in the week, according to SMM data, domestic zinc ingot social inventory further decreased to 144,300 mt, and November domestic smelter production pulled back to below 600,000 mt. Supply-side contraction expectations injected upward momentum into SHFE zinc. Despite supply-side reduction expectations in fundamentals, overall market consumption showed mediocre performance, with end-users mainly making just-in-time procurement, limiting demand-side support and keeping SHFE zinc fluctuating. Then, from a macro perspective, market expectations for a December US Fed interest rate cut were relatively optimistic, and several important domestic meetings scheduled within the month boosted overall market sentiment, providing upward momentum for SHFE zinc. From a domestic fundamental perspective, zinc ingot inventory data from seven regions released on Thursday continued the destocking trend, helping SHFE zinc climb further. As of 15:00 Friday, SHFE zinc recorded 23,305 yuan/mt, up 880 yuan/mt, a gain of 3.92%.