Domestic Conference Releases Positive Signals, Zinc Prices Continue to Rise This Week [SMM Market Review – Weekly Price Commentary]

SMM March 7 News:
LME Zinc: At the beginning of the week, influenced by the US January personal spending monthly rate being lower than the previous and expected values, and the US February Chicago PMI exceeding expectations, LME zinc maintained a fluctuating trend. On Monday, the higher-than-expected US February S&P Global Manufacturing PMI data and the lower-than-expected US February ISM Manufacturing PMI further contributed to the fluctuating trend of LME zinc. Subsequently, from the overseas perspective, the US February ADP employment data recorded 77,000, below the expected 140,000. The unexpectedly weak “US ADP employment data” intensified market risk aversion sentiment. Meanwhile, concerns over the impact of tariffs on inflation and the economy dampened market confidence in the economy. Coupled with the unpredictable tariff policies of Trump, the US dollar index declined for three consecutive days. Domestically, the convening of the Two Sessions provided certain positive signals to the market, driving LME zinc upward. Recently, the continuous tariff policy shocks have further undermined market confidence in the future, while the ongoing reduction in overseas inventories provided some support for LME zinc. As a result, LME zinc maintained a fluctuating trend. As of 15:00 this Thursday, LME zinc recorded $2,900/mt, an increase of $102/mt, or 3.65%.

SHFE Zinc: At the beginning of the week, China’s February Caixin Manufacturing PMI recorded 50.8, reaching a three-month high. Meanwhile, the market held certain expectations for the upcoming Two Sessions, leading to a slight increase in SHFE zinc. Subsequently, according to SMM data, as of March 3, the total domestic social zinc inventory recorded 136,500 mt, with a reduction in inventory providing some support for zinc prices. However, the “progress bar” of end-use demand remained incomplete, and SHFE zinc maintained a fluctuating trend. Later, the US officially imposed an additional 10% tariff on Chinese goods, with the tariff “big stick” impacting domestic market confidence, causing SHFE zinc to decline slightly. Following this, the domestic Two Sessions outlined major expected targets for 2025, and for the first time, the requirement to “stabilize the real estate and stock markets” was included in the General Requirements of the Government Work Report, providing some confidence to the real estate market and boosting market sentiment to a certain extent. SHFE zinc recovered its losses and continued to rise. Subsequently, domestic social inventories decreased slightly, but under the influence of the overseas market, SHFE zinc maintained a fluctuating trend. As of 15:00 this Thursday, SHFE zinc recorded 24,000 yuan/mt, an increase of 575 yuan/mt, or 2.45%.

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