[SHFE/LME zinc price ratio continued to consolidate around 6.8]: This week, the SHFE/LME zinc price ratio consolidated around 6.8, and the zinc ingot export window opened intermittently. Outside China, the US July PPI unexpectedly came in below expectations, inflationary pressures were fading, and rate hike expectations weakened. Market sentiment improved slightly and US-Iran uncertainty increased. LME zinc inventories continued to destock, capital concentration was relatively high, and LME zinc continued to fluctuate at highs.

[SMM Zinc Morning Comment: Inventory Pressure Remains Significant; SHFE Zinc Price Center Shifts Lower] Overnight, the most-traded SHFE zinc 2609 contract opened at 25,935 yuan/mt, its intraday high. Then bulls reduced positions, and SHFE zinc fell all the way, dipping to 25,695 yuan/mt near the close, before finally closing down at 25,720 yuan/mt, down 110 yuan/mt, or 0.43%. Trading volume fell to 53,350 lots, and open interest declined by 2,944 lots to 111,000 lots.

As of July 28, LME zinc inventories (including off-warrant stocks) had fallen to 119,600 mt, down by approximately 45,000 mt from mid-June. As overseas inventories continued to decline, the LME zinc market structure shifted from contango to backwardation, with the backwardation widening further. By July 28, the LME zinc cash-to-3M spread had strengthened to US$61.09/mt.

[SMM Zinc Morning Comment] Overnight, the most-traded SHFE zinc 2609 contract opened at 24,750 yuan/mt. In early trading, it shot up to touch 24,760 yuan/mt. Then, as bulls reduced positions, the price pulled back and fell to a low of 24,655 yuan/mt. Late in the session, as bears reduced positions, the price rebounded slightly and moved sideways, finally closing down at 24,690 yuan/mt, down 75 yuan/mt, or 0.30%. Trading volume fell to 34,929 lots, and open interest decreased by 1,850 lots to 103,000 lots.

[SMM Zinc Morning Brief: US Dollar Index Rose from Lows, LME Zinc Stays High]: Last Friday, LME zinc opened at $3,616.5/mt. After opening, LME zinc drifted higher, touching a high of $3,637.5/mt before pulling back all the way. Near the night session, LME zinc dipped to a low of $3,580/mt. Then LME zinc rebounded from the low to near the daily average line, finally settling at $3,611.5/mt, down $4.5/mt or 0.12%. Trading volume decreased to 12,329 lots, and open interest fell by 469 lots to 268,000 lots...

[SMM Zinc Morning Comment: Fundamentals Show Both Bullish and Bearish Factors, SHFE Zinc Consolidates at Highs] Last Friday, the most-traded SHFE zinc 2608 contract opened at 24,790 yuan/mt, dipped to a low of 24,780 yuan/mt in early trading, then drifted higher after the opening, hitting a high of 24,945 yuan/mt, before pulling back to near the daily average line, maintaining a fluctuating trend, and finally closing flat at 24,865 yuan/mt, with trading volume decreasing to 37,825 lots..

[SMM Morning Comment on Zinc] The most-traded SHFE zinc 2608 contract opened at 24,605 yuan/mt overnight. In early trading, bulls added positions, quickly pushing SHFE zinc up to a high of 24,750 yuan/mt. Then SHFE zinc consolidated, eventually closing up at 24,670 yuan/mt, up 155 yuan/mt, or 0.63%. Trading volume decreased to 56,555 lots, and open interest increased by 1,941 lots to 90,819 lots.

As of May 26, the Shanghai-LME zinc price ratio stood at 6.97, continuing its downward trend from 7.4 recorded in late March, which has led to a widening import loss of refined zinc ingots in China. According to calculations by Shanghai Metals Market (SMM), the current import loss of China’s refined zinc ingots has expanded to approximately RMB 3,800 per metric ton of metal.

[Non-Farm Payrolls Data Exceed Expectations, SHFE and LME Zinc Prices Pull Back] At the beginning of the week, the gradual digestion of macro sentiment led to a decline in LME zinc; however, continued destocking of overseas LME zinc inventory provided bottom support for prices. Subsequently, as the market continued to await the delayed release of non-farm payrolls and CPI data, trading activity became more cautious, and LME zinc maintained a fluctuating trend.

[Macro and Fundamentals Game, Zinc Price Center Lowered This Week] At the beginning of the week, the LME zinc contract continued last week's rising trend; subsequently, the policy outlook of major overseas central banks remained unclear, and the market adopted a wait-and-see stance, leading the LME zinc contract to shift into consolidation...