Macro Disturbances Coupled With Rising Inventory in China Weighed on Prices, and the Centers of Both SHFE and LME Moved Lower This Week [SMM Market Review - Weekly Price Review]

LME zinc: At the start of the week, Trump said the conflict with Iran was basically over, sending the US dollar index sharply lower and lifting the center of LME zinc prices; uncertainty then increased, with some funds exiting, and LME zinc came under pressure; easing inflation concerns then supported a rebound in zinc prices; however, the market continued to weigh Trump’s conflicting remarks on Iran, while the US dollar maintained a fluctuating trend, and with inventories outside China increasing, LME zinc lacked upward momentum and pulled back again; afterward, investors remained cautious about escalating conflict in the Middle East, the US dollar strengthened, and US February CPI met expectations while inflation remained sticky, causing LME zinc to fluctuate lower. As of 15:00 this Friday, LME zinc was recorded at $3,293.5/mt, down $29.5/mt, or 0.89%.

SHFE zinc: At the start of the week, SHFE zinc rose, driven by gains in the LME market; however, according to SMM data, as of this Monday, China’s zinc social inventory had risen to above 260,000 mt, with ample supply and average demand, while domestic smelters gradually resumed production and supply continued to be released, putting SHFE zinc under pressure; afterward, the Two Sessions revived China’s macro sentiment, and SHFE zinc rebounded slightly, recovering part of its losses; then, under the combined impact of loose domestic supply, gradually recovering downstream consumption, and continued uncertainty in overseas macro conditions, SHFE zinc maintained a fluctuating trend; however, SHFE zinc opened lower with a gap, affected by weakness in the LME market; after the LME market stopped falling and stabilized, it surged again to recover losses; but as China’s social inventory climbed to a three-year high, SHFE zinc fluctuated and pulled back again. As of 15:00 this Friday, SHFE zinc was recorded at 24,140 yuan/mt, down 120 yuan/mt, or 0.49%.