Improved macro sentiments, tighter supply, and better consumption expectations led zinc prices to fluctuate at highs

With the announcement of the US CPI data, market bets on a 25-basis point rate cut by the US Fed increased, alleviating concerns about an economic recession; Harris' rise in support also spurred the market to unwind the "Trump trade." Domestically, improved expectations about favorable policies and funding in the real estate sector lifted market risk appetite, improving macro sentiments. Fundamentals side, rising by-product prices and electricity costs led to decreased profits for overseas smelters, dampening their production enthusiasm. Additionally, Odda Zinc Smelter's planned expansion by 150,000 mt this Q4 got postponed to Q1 next year due to roasting equipment construction delays, reducing overseas smelting output for the year, with LME inventories falling to a monthly low. Domestically, zinc concentrate production in September may improve slightly to 370,900 mt (WoW). Although port inventories of zinc concentrate increased, the rise was limited, and coupled with the failed production reductions by smelters in September and October, output increased WoW, maintaining a short-term supply tightness and keeping TCs low. Despite an improvement in smelting output, it remains low overall. With the dual holiday seasons approaching and zinc prices at low levels, spot premiums rose rapidly, the spot market performed strongly. Consumption-wise, the "September-October peak season" expectations were delayed but orders still improved WoW, and with the prices of ferrous metals stabilizing, galvanising orders improved. Additionally, SMM's continued destocking in seven cities indicated ongoing optimism about consumption. Overall, improved macro sentiments, tighter supply, and better consumption expectations led zinc prices to fluctuate at highs.