Inventory Tug-of-War + Macro Boost, SHFE and LME Zinc Prices Both Rose Slightly This Week [SMM Market Review - Weekly Price Commentary]

LME Zinc: At the beginning of the week, the US dollar index retreated from highs, but the continuous increase in LME zinc ingot inventory suppressed zinc prices, and LME zinc maintained a fluctuating trend. Subsequently, the US dollar index continued to weaken, nonferrous metals generally rose, and LME zinc rose in response. However, the LME market's 0-3 Contango structure persisted, putting LME zinc under pressure and causing it to pull back slightly. Later, the US Q3 real GDP expanded at a rate of 4.3%, the fastest growth in two years. The strong economic data boosted demand prospects, market sentiment was relatively positive, and this pushed LME zinc higher. Then, as overseas inventories continued to increase, breaking through the 100,000 mt mark, upward pressure on prices emerged, and LME zinc moved lower under pressure. Subsequently, the market was closed for the Christmas holiday. As of 3:00 Thursday, LME zinc was recorded at $3,086.5/mt, up $8.5/mt, an increase of 0.28%.

SHFE Zinc: At the beginning of the week, SHFE zinc continued last week's fluctuating trend. Subsequently, although increased domestic social inventory and mediocre end-use consumption dragged down the price center of zinc, expectations for domestic zinc ingot production cuts provided support, and prices maintained a fluctuating pattern. Then, driven by the external market, SHFE zinc opened higher with a gap. However, year-end downstream consumption was generally weak, coupled with the closure of the zinc ingot export window, upward momentum was insufficient, and prices turned to a continuous decline. Later, disturbed by persistently low zinc concentrate TCs, the center of SHFE zinc prices rose again. However, under the influence of continuously increasing overseas inventories, LME zinc moved lower, subsequently dragging SHFE zinc down in sync. But market expectations for domestic supply reductions remained, and coupled with a decline in domestic zinc ingot inventory, SHFE zinc continued to rise. As of 15:00 Friday, SHFE zinc was recorded at 23,170 yuan/mt, up 95 yuan/mt, an increase of 0.41%.