Macro and Fundamental Bull-Bear Interweaving, SHFE and LME Maintain Fluctuating Trend [SMM Market Review - Zinc Price Weekly Review]

LME zinc: At the beginning of the week, the US and Iran reached a memorandum of understanding, and macro sentiment continued to improve, but the US dollar index kept rising, so LME zinc fluctuated at highs. Subsequently, LME zinc ingot inventory rose markedly to over 120,000 mt, putting pressure on zinc prices, and LME zinc moved lower. Then, ahead of the US Fed’s interest rate decision, the market was gripped by a strong wait-and-see sentiment, LME zinc’s decline paused, and it moved sideways. Later, inventories outside China edged down, coupled with ongoing supply-side disruptions, bears reduced their positions, and LME zinc rebounded from lows. However, the Fed’s dot plot implied a rate hike later this year, keeping inflationary pressure alive, and zinc prices headed lower again. That said, the US-Iran peace talks still provided a positive boost to sentiment, and amid the tug of war between bulls and bears, LME zinc maintained a fluctuating trend. As of 15:00 this Thursday, LME zinc stood at $3,569/mt, up $14/mt, a gain of 0.39%.

SHFE zinc: At the start of the week, buoyed by the positive sentiment from the US-Iran memorandum of understanding, SHFE zinc rose in tandem with the LME. But growing domestic inventory buildup capped the zinc price advance, and with overseas zinc inventory increasing to over 120,000 mt, SHFE zinc pulled back slightly. However, the tight ore supply pattern in China still lent some support to zinc price movements, and SHFE zinc stopped falling, stabilized, and maintained a fluctuating trend. Next, SHFE zinc opened higher with a gap, driven by an LME upturn, but with end-use demand lacking sufficient support during the off-season and domestic inventory continuing to build, strong overhead resistance emerged, and the zinc price pulled back after the gap-up open; thereafter, SHFE zinc recovered some of its losses. As of 15:00 this Thursday, SHFE zinc stood at 24,820 yuan/mt, up 425 yuan/mt, a gain of 1.74%.