SHFE and LME Zinc Prices Remained Stable Last Week

LME zinc: Prices were stable last week. The hawkish stance of the Federal Reserve grew market concerns early last week. The Dallas Fed Manufacturing Index in June was lower than expected and recorded -23.2, while the Conference Board Consumer Confidence Index in the US in June exceeded expectations and came in at 109.7. US annualised new home sales in May topped expectations and stood at 763,000. US GDP growth in the first quarter was revised up to 2%. US initial jobless claims two weeks ago dropped significantly to 23.9. The Eurozone Economic Sentiment Indicator fell again to 95.3 in June.

Newmont's mine union in Mexico launched a strike. The annualised core PCE price index for the US in the first quarter was better than expected and recorded 4.9%. LME zinc prices remained stable. As of Friday June 30, LME zinc prices closed at $2,354/mt, down $4/mt or 0.17% during the week.

SHFE zinc: At the beginning of the week, the contract opened lower affected by the international macroeconomic sentiment. Then Chinese Premier said that more policies are in the pipeline to expand the domestic demand. On the fundamentals front, large inflows of imported zinc concentrate have ensured ample raw materials at smelters. Meanwhile, the continued influx of imported zinc ingot has weighed on spot premiums. SHFE zinc prices lacked ability to rise and stabilised amid ample supply.

At the week’s end, Fed’s hawkish stance resulted in SHFE zinc prices opening lower. But as China’s official manufacturing PMI in June strengthened to 49, market confidence restored to some extent, helping SHFE zinc prices rally. At 15:00 CST last Friday, SHFE zinc prices closed at 20,045 yuan/mt, an increase of 45 yuan/mt, or 0.22%, during the week.