China's Q1 GDP Achieved a "Stable Start," Zinc Prices on SHFE and LME Maintained a Fluctuating Trend [SMM Market Review - Weekly Price Commentary]

LME zinc: At the beginning of the week, LME zinc maintained the fluctuating trend from last week. Subsequently, US Fed Governor Waller stated at an event that considering the inflationary impact of Trump's tariff policies on the US economy might be temporary, an interest rate cut could be implemented in H2 under a relatively small tariff scenario. Meanwhile, the March New York Fed's 1-year inflation reading was higher than the previous value and expectations, leading to a decline in LME zinc. Then, the April New York Fed Manufacturing Index was released at -8.1, which, although higher than the previous value and expectations, still remained in contraction territory. Additionally, the US once again targeted Chinese goods, announcing an investigation into the national security risks posed by its reliance on imported processed critical minerals and their derivative products, with the highest tariff potentially reaching 245%, causing LME zinc to continue its downward trend. Although overseas inventories increased by 78,525 mt to 190,550 mt, China's Q1 GDP growth rate reached 5.4%, ranking among the top in major global economies and surpassing the 5.3% YoY growth, leading to improved macro sentiment and a slight rise in zinc prices. Subsequently, influenced by the rise in the US dollar index, LME zinc pulled back slightly. As of 15:00 on Thursday, LME zinc recorded $2,596.5/mt, down $64.5/mt, a decrease of 2.42%.

SHFE zinc: At the beginning of the week, SHFE zinc maintained the fluctuating trend from last week. According to SMM data, as of Monday (April 14), the total zinc ingot inventory in seven regions monitored by SMM was 105,600 mt, an increase of 3,500 mt WoW, indicating a slight inventory buildup. Coupled with the influence of the LME, SHFE zinc continued to decline. From a fundamental perspective, there is an expectation of relatively loose domestic supply in the future. However, from a macro perspective, China's economy started the year steadily, with Q1 GDP up 5.4% YoY, surpassing the national growth rate of 5% last year and the 5.3% growth in Q1 last year, ranking among the top in major global economies, and the "positive" trend continued, keeping SHFE zinc in a fluctuating trend. Subsequently, the White House announced that tariffs on Chinese imports could be raised to as high as 245%, leading to a decline in SHFE zinc. However, the market is still digesting the excellent performance shown by China's GDP, and with a reduction in domestic social inventory, SHFE zinc rose under multiple influences. Later, driven by the LME, SHFE zinc pulled back slightly. As of 15:00 on Thursday, SHFE zinc recorded 21,990 yuan/mt, down 415 yuan/mt, a decrease of 1.85%.

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