The Fed raised interest rates by 25 basis points in February, but the inflation was still high, suggesting that the Fed will raise the interest rate further. The US January ISM manufacturing PMI dropped to 47.4, the lowest level since May 2020.

The main market focus in March has been on the US non-farm payroll and CPI data for February. The Fed’s benchmark interest rate has been raised to around 5.5%, and the chronic high interest rate has dented the demand for commodities.

LME zinc fluctuated following the US Fed's hawkish remarks and the low LME zinc inventory early last week.

Last Friday, LME zinc continued to weaken, and LME zinc inventory added by 2,750 mt to 33,400 mt.

On the macro front, the annualised US PCE in January exceeded expectations and the previous value, showing that US inflation is still high, which further strengthened the market’s strong expectations for the Fed to remain hawkish. The US index rose.

According to foreign media news on February 21, the research team of Commerzbank said that due to the tight supply and the recovery of Chinese demand, the average price of zinc is expected to be $3,800/mt in 2023.