LME zinc: At the beginning of the week, LME zinc prices rose slightly. Subsequently, China's social inventory continued the upward trend from the previous week, reaching 81,700 mt. The increase in supply led to a decline in both SHFE and LME zinc prices. Then, as the market remained nervous about the progress and outcome of the second round of negotiations between China and the US, LME zinc prices continued to edge lower. Subsequently, representatives from both China and the US indicated that the negotiations had made some progress, and trade tensions continued to ease, causing LME zinc prices to rise. However, tensions in the Middle East rapidly escalated. At the same time, Trump's confidence in reaching an Iran nuclear deal waned, and the US announced that it would authorize the voluntary evacuation of US military families from the Middle East and reduce the size of the US mission in Iraq. Amid these tensions, LME zinc prices continued to decline. Subsequently, US CPI data for May fell short of expectations across the board, with core CPI increasing by only 0.1%. This heightened market risk aversion, and LME zinc prices surged rapidly. Then, LME zinc prices quickly pulled back again in a market filled with uncertainties. Subsequently, as the market gradually absorbed these uncertainties, LME zinc prices recovered some of their losses and rose slightly. As of 15:00 on Thursday this week, LME zinc was recorded at $2,661/mt, down $1.5/mt or 0.06%.
SHFE zinc: At the beginning of the week, SHFE zinc prices rose slightly, driven by the increase in LME zinc prices. Subsequently, according to SMM data, as of Monday this week (June 9), the total inventory of zinc ingots across seven locations tracked by SMM continued the upward trend from the previous week, increasing further to 81,700 mt. Meanwhile, downstream consumption entered the seasonal off-season, and SHFE zinc prices fell rapidly under the influence of fundamental factors. Subsequently, the progress and outcome of the China-US negotiations also affected domestic market sentiment, and SHFE zinc prices maintained a fluctuating trend while awaiting developments. Then, according to statements from both China and the US, the trade negotiations had made some progress. Driven by this, macro sentiment continued to recover, and SHFE zinc prices rose continuously under the influence of sentiment. However, the recent rapid escalation of tensions in the Middle East once again caused SHFE zinc prices to edge lower under the influence of the situation and driven by LME zinc prices. Subsequently, SHFE zinc prices maintained a fluctuating trend. However, SMM data showed that as of Thursday this week, domestic zinc social inventory had decreased, and the reduction in supply supported a slight increase in SHFE zinc prices. As of 15:00 on Thursday this week, SHFE zinc was recorded at 22,085 yuan/mt, down 300 yuan/mt or 1.34%.
![Monthly Production Declined: Refined Zinc Faces Dual Pressure from Raw Material Supply and Costs [SMM Analysis]](https://imgqn.smm.cn/usercenter/qdibi20251217171755.jpg)
