SHFE and LME Zinc Prices Fell And Then Rebounded Last Week

LME zinc: The LME market closed last Monday due to spring bank holiday. The market panic about the US debt ceiling issue eased  and LME zinc prices moved steadily. Crude oil prices fell sharply, and the Economic Sentiment Index of the eurozone in May recorded 96.5 which was lower than expectations. The Fed once again released a hawkish signal, and short funds entered the market. LME zinc prices lacked upward momentum. The US JOLTs job openings exceeded expectations in April and recorded 10.103 million, and the US dollar index strengthened. Meanwhile, LME zinc inventories increased significantly by 13,175 mt to 87,500 mt, and LME zinc prices declined.  The Federal Reserve released the latest Beige Book showing that US employment and inflation have cooled recently. The market expected that the Fed will not raise interest rate in June. This, combined with upbeat domestic economic data, attracted longs to enter the market. LME zinc prices thus rebounded. As of 18:00 CST last Friday, LME zinc prices closed at $2,325.5/mt, down $12.5/mt, or 0.53% during the week.

SHFE zinc: The news of production reduction at smelters at the beginning of the week boosted the market to a certain extent, and SHFE zinc prices moved rangebound. China’s manufacturing PMI in May was lower than expected and recorded 48.8%, indicating that China’s economic prosperity has declined and market sentiment was depressed again. This, combined with weaker LME zinc, pushed down SHFE zinc prices slowly. Downstream buying interest was weak, and the inflow of imported zinc ingots increased the supply. The orders of downstream companies were weak, and zinc prices lacked upward momentum. In May, China Caixin manufacturing PMI exceeded expectations and recorded 50.9, returning to the expansion range. China's economic recovery is still resilient, and market sentiment has recovered. SHFE zinc prices rallied slightly. As of 15: 00 CST last Friday, SHFE zinc prices closed at 19,300 yuan/mt, with a weekly increase of 15 yuan/mt or 0.08%.

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