SHFE and LME Zinc Prices Rebound Last Week

LME Zinc: Early in the week ending June 21, US Fed officials indicated that bringing inflation back to target levels would be a long process, with hawkish comments continuing. The market's cautious sentiment towards rate cuts was restored, leading to a brief decline in LME zinc to a weekly low. LME zinc then rebounded from the low, recovering losses and continuing to rise. However, as the US dollar index rose again, LME zinc fell once more. Subsequently, US May retail sales rose 0.1%, lower than the expected 0.3%, strengthening the case for a rate cut by the US Fed later this year. The US dollar index also fell, boosting LME zinc prices. But US Fed officials kept dampening rate cut expectations, leading to LME zinc hovering at high levels. By Thursday 15:00 CST, LME zinc recorded $2,865/mt, up $75/mt for the week, a 2.69% increase.

SHFE Zinc: Early in the week, China's May industrial output for above-scale enterprises grew 5.6% YoY, and May total retail sales grew 3.7% YoY. Domestic economic data was released, with industrial data weaker than expected, leading to poor market sentiment and a decline in SHFE zinc prices. Subsequently, tight supply of ore continued to support zinc prices, together with the impact of the overseas market, leading to a rebound in SHFE zinc prices. As US economic data fell short of expectations and the US dollar index declined, SHFE zinc prices rebounded and continued to rise. During the week, downstream producers restocked at low prices, and zinc ingot social inventory continued to decline. However, with demand weakening during the off-season, SHFE zinc lacked upward momentum and hovered around the current level. By Thursday 15:00 CST, SHFE zinc recorded 23,840 yuan/mt, up 320 yuan/mt or 1.36% for the week.