Positive Domestic Macro News Released, Zinc Prices Rise in Both Domestic and Overseas Markets [SMM Market Review - Weekly Price Commentary]

SMM December 27 News:

LME Zinc: At the beginning of the week, influenced by the cooling of the US Fed's preferred inflation indicator last Friday, expectations for US Fed interest rate cuts warmed up, and the US dollar index pulled back from a two-year high. Coupled with the continuous decline in overseas inventories, LME zinc rose steadily under these circumstances. Subsequently, as the market gradually digested macro news, LME zinc pulled back. However, the US December Conference Board Consumer Confidence Index and November annualized new home sales figures released in the evening both fell short of expectations, declining simultaneously. Meanwhile, positive signals from China's fiscal work conference drove LME zinc upward under multiple influences. Following this, the US dollar index rose for the second consecutive trading day, ultimately closing at 108.14, while overseas inventories continued to decrease, and LME zinc maintained a fluctuating trend. Later, LME zinc was closed due to the overseas Christmas holiday. As of 3:00 AM this Wednesday, LME zinc recorded $3,034/mt, up $61.5/mt, an increase of 2.07%.

SHFE Zinc: At the beginning of the week, the recent tight spot supply in the domestic market continued to support zinc prices, with SHFE zinc rising slightly. Subsequently, under the influence of the overseas market and a significant increase in November zinc ore imports, SHFE zinc edged lower. Then, during China's national fiscal work conference, which summarized 2024 fiscal work and planned key tasks for 2025, it was pointed out that the fiscal deficit ratio should be raised in 2025, and larger-scale government bonds should be issued. This boosted market confidence, and macro positive sentiment gradually emerged, driving SHFE zinc to rise steadily. Later, as the market fully digested the macro positive sentiment and with year-end downstream consumption gradually weakening, despite a reduction in social inventory, the continuous inflow of imported zinc ingots into the domestic market this week led to a decline in SHFE zinc. As of 3:00 PM this Thursday, SHFE zinc recorded 25,395 yuan/mt, up 435 yuan/mt, an increase of 1.74%.

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