[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 Meeting Minutes: LME Inventory Continues Destocking, LME Zinc Center Moves Higher]: Overnight, LME zinc opened at $3,727.5/mt. It drifted lower in early trading, dipping to a low of $3,726/mt, then stopped falling and rebounded, touching a high of $3,786/mt during the night session. Gains narrowed in late trading, and it eventually closed higher at $3,745/mt, up $10.5/mt, or 0.28%. Trading volume fell to 10,364 lots, and open interest increased by 145 lots to 250,000 lots.

[SHFE/LME Price Ratio Consolidates Around 6.8]: This week, the SHFE/LME price ratio pulled back to consolidate around 6.8, with the zinc ingot import window remaining closed. Outside China, the US ADP employment data fell short of expectations, while the US dollar index and US Treasury yields consolidated. LME inventory dropped below 100,000 mt, and the cash-to-three-month backwardation structure held at a high of around $60/mt, extending the tightness in the spot market outside China, driving LME zinc to a multi-year high.

[SMM Zinc Morning Comment: SHFE Zinc Continues to Consolidate at Highs; Focus on Subsequent Export Performance] Overnight, the most-traded SHFE zinc 2609 contract opened at 25,110 yuan/mt. After opening, SHFE zinc fluctuated higher, reaching a high of 25,270 yuan/mt, then maintained a fluctuating trend above the daily average. Nearing the end of trading, SHFE zinc dipped slightly, dipping to a low of 25,100 yuan/mt at the end. It finally closed up at 25,165 yuan/mt, up 90 yuan/mt, or 0.36%..

[Frequent disruptions in China’s supply side; TCs fell in many regions of China in August]: On a weekly basis, the SMM Zn50 domestic weekly average TC fell 400 yuan/mt Zn WoW to -1,150 yuan/mt Zn, and the SMM Imported Zinc Concentrate Index fell $3.5/dmt WoW to -$98.13/dmt. On a monthly basis, the SMM Imported Zinc Concentrate Index fell $17.01/dmt MoM in July to -$89.81/dmt....

[Trader Shipment Willingness is Low at Month-End, Market Holds Prices Firm]: This week, spot premiums in Shanghai rose, with the average price increasing by 10 yuan/mt WoW. As of this Friday, ordinary domestic brands were quoted at a premium of 20~30 yuan/mt against the 2609 contract, while the high-end brand Shuangyan was quoted at a premium of 130 yuan/mt against the 2609 contract.

The SHFE/LME zinc price ratio pulled back to around 6.8 and consolidated: This week, the ratio pulled back to around 6.8 and consolidated, closing the zinc ingot import window. Outside China, the US Fed stood pat at its July meeting, US GDP and PCE data missed expectations, and the pullback in the US dollar index boosted base metals. Meanwhile, LME inventory dropped to around 100,000 mt, and LME zinc remained relatively strong.

SHFE/LME zinc price ratio pulled back to around 6.8 and consolidated: This week, the ratio pulled back to around 6.8 and consolidated, while the zinc ingot import window closed. Outside China, the US Fed held steady at its July FOMC meeting, while US GDP and PCE data came in below expectations, causing the US dollar index to pull back and boost base metals. Meanwhile, LME zinc inventory fell to around 100,000 mt, and LME zinc remained relatively strong.

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.

[Zinc Ingot Export Window Opening? A Nearly 20-Year Rare Opportunity Reemerges!] As of July 28, LME zinc inventory (including non-registered warrants) had pulled back to 101,800 mt, down about 20,000 mt from mid-June. Amid continued destocking outside China, the LME zinc market structure shifted from contango to backwardation, and the backwardation structure kept widening. On July 28, the LME zinc Cash-3M spread strengthened to $61.09/mt. In stark contrast, zinc consumption in China remained in the traditional off-season, with SMM-reported social inventory of zinc ingots across seven domestic markets holding steady at a high level of around 260,000 mt. The supply-demand patterns in China and overseas clearly diverged, and the SHFE/LME zinc price ratio weakened all the way. Against this backdrop, the long-dormant export window for Chinese zinc ingots reappeared, and discussions in the market about reverse arbitrage involving "buying SHFE zinc, selling LME zinc" noticeably heated up...