Price Overview - The mainstream transaction price for 0 zinc is concentrated between 22,650 to 22,785 CNY/ton, with specific transactions for Shuangyan at 22,730 to 22,855 CNY/ton, and 1 zinc at 22,580 to 22,715 CNY/ton [1] - On July 30, the price list for 0 zinc ingots shows various market prices, with the highest at 22,850 CNY/ton in Zhejiang and the lowest at 22,520 CNY/ton in Guangdong [2] Futures Market - The closing price for the main contract of zinc futures on July 30 is reported at 22,670 CNY/ton, with a slight increase of 0.04%, reaching a high of 22,770 CNY/ton and a low of 22,610 CNY/ton during the day, with a trading volume of 141,408 lots [2] Production and Inventory Insights - Grupo Mexico reported a zinc concentrate production of 45,900 tons in Q2 2025, marking a 56% year-on-year increase, attributed to improved operations at the Buenavista zinc mine [3] - As of July 30, the London Metal Exchange (LME) reported zinc registered warrants at 57,600 tons and canceled warrants at 51,450 tons, with a decrease of 3,100 tons; total zinc inventory stands at 109,050 tons, also down by 3,100 tons [3] Market Analysis - According to a report from Copper Crown Jinyuan Futures, the ongoing US-China trade tensions are expected to extend the 24% tariffs and countermeasures for another 90 days, with no significant breakthroughs in negotiations. The market is awaiting the Federal Reserve's interest rate decision and important domestic meetings [4] - Despite heavy rainfall in the northern regions not affecting galvanizing plant production, weak downstream demand and insufficient purchasing strength at high zinc prices are leading to a slight increase in spot prices, with expectations of inventory accumulation [4] - The short-term zinc price trend is anchored by macroeconomic factors, with expectations of narrow fluctuations in the near term [4]

Report Summary 1. Investment Rating - There is no specific industry investment rating provided in the report. 2. Core View - Zinc prices have declined, and the demand in the spot market has not improved significantly, with mainly rigid - demand procurement. The cost of imported ore TC is rising, and the smelting profit is increasing, leading to an expected increase in supply. Although the downstream consumption shows some resilience, it cannot offset the high growth on the supply side, resulting in a continuous increase in social inventories. After the market sentiment fades, zinc prices are expected to return to the fundamental logic, and due to the consumption off - season and supply pressure, zinc prices face significant pressure [4]. 3. Summary by Related Contents 3.1 Important Data - **Spot**: The LME zinc spot premium is - 1.96 dollars/ton. The SMM Shanghai zinc spot price dropped 120 yuan/ton to 22650 yuan/ton, and its premium rose 35 yuan/ton to - 45 yuan/ton. The SMM Guangdong zinc spot price fell 160 yuan/ton to 22600 yuan/ton, and its premium decreased 5 yuan/ton to - 95 yuan/ton. The SMM Tianjin zinc spot price declined 120 yuan/ton to 22600 yuan/ton, and its premium increased 35 yuan/ton to - 95 yuan/ton [2]. - **Futures**: On July 28, 2025, the SHFE zinc main contract opened at 22905 yuan/ton, closed at 22645 yuan/ton, down 200 yuan/ton from the previous trading day. The trading volume was 193107 lots, an increase of 41021 lots, and the position was 124461 lots, a decrease of 4767 lots. The highest price reached 22965 yuan/ton, and the lowest was 22575 yuan/ton [2]. - **Inventory**: As of July 28, 2025, the total SMM seven - region zinc ingot inventory was 103700 tons, an increase of 11000 tons from last week. The LME zinc inventory was 115500 tons, a decrease of 275 tons from the previous trading day [3]. 3.2 Market Analysis - **Cost**: The new - month tender price of domestic ore has not been determined, while the imported ore TC is still rising, with the highest offer reaching 85 dollars/ton, and the smelting profit is increasing. The smelting plants have sufficient raw material reserves and low enthusiasm for ore procurement, so the TC is expected to continue rising [4]. - **Supply and Demand**: The downstream consumption shows some resilience, but the high growth on the supply side leads to an increase in social inventories, and this trend is expected to continue in the second half of the year. Considering the consumption off - season and supply pressure, zinc prices face significant pressure [4]. 3.3 Strategy - **Unilateral**: Cautiously bearish [5]. - **Arbitrage**: Neutral [5].

Core Viewpoint - The zinc market is experiencing a stable supply and demand situation, with an increase in both domestic and imported zinc concentrate inventories, while consumption is expected to decline in the short term due to seasonal factors [1] Supply Side - Domestic zinc concentrate market remains stable, with the average weekly TC price at 3,800 RMB per metal ton and the imported zinc concentrate index rising to 73.75 USD per dry ton [1] - Port inventories of imported zinc concentrate increased by 107,000 tons to 440,000 tons, indicating a robust supply [1] - Despite the increase in imported TC, domestic smelting profits are high, leading smelters to prefer domestic concentrate, suggesting potential for further TC increases [1] Smelting Sector - In July, domestic smelting plants are undergoing both maintenance and resumption of operations, with refined zinc output expected to increase by approximately 12,000 tons month-on-month [1] - The recent rise in zinc concentrate processing fees has expanded smelter profits, and with sufficient domestic zinc concentrate supply, smelting activity is likely to increase [1] Consumption Trends - July and August are typically off-peak months for zinc consumption, resulting in reduced terminal orders and lower operational enthusiasm among downstream enterprises [1] - Downstream raw material inventories are at high levels, leading to poor purchasing sentiment, although policies like "old for new" may stimulate consumption [1] - Attention should be paid to consumption in infrastructure, automotive, and home appliance sectors [1] Inventory Data - As of July 17, SMM zinc ingot inventory stood at 93,500 tons, an increase of 400 tons from July 14 and 3,200 tons from July 10 [1] - LME zinc inventory on July 18 was 119,100 tons, up 13,900 tons from July 11 [1] Market Outlook - The macroeconomic environment is improving, with indications of short positions exiting the market [1] - Zinc prices may rebound due to macroeconomic and funding conditions, but medium to long-term outlook suggests ample supply from the mining sector and potential for TC increases [1] - Smelters are expected to maintain high operating rates, leading to increased refined zinc supply, while consumption is entering a seasonal decline, potentially resulting in inventory accumulation [1] Trading Strategy - A single-sided trading approach is recommended, with short-term zinc prices expected to be strong, allowing for day trading on long positions [1] - As macro sentiment fades, consider shorting based on inventory accumulation levels [1] - For arbitrage operations, a wait-and-see approach is advised [1]

Group 1: Zinc Price Trends - Zinc prices showed a downward trend in the first half of the year, influenced by increasing overseas mine supply and weak demand [2] - From late March to early April, zinc prices further declined due to the impact of U.S. tariff policies and a gradual increase in zinc mine output [2] - By April to June, the impact of U.S. tariffs lessened, but low inventory levels continued to affect prices, leading to a weak consolidation phase [2] Group 2: Zinc Supply Dynamics - Global zinc mine production increased by nearly 190,000 tons in the first four months of 2024, a year-on-year growth of 5.1%, primarily driven by the resumption of overseas mines [3] - Domestic zinc mine production decreased by nearly 30,000 tons year-on-year, slightly below expectations [3] - The cash cost of zinc mines at the 90th percentile is approximately $2,000 per ton, indicating a profit margin of nearly 30% based on average zinc prices [3] Group 3: Smelting and Refining Insights - Global zinc ingot production decreased by about 106,000 tons year-on-year in the first four months, with China's production down nearly 130,000 tons [3] - Zinc concentrate inventory at smelting plants increased by nearly 22% year-on-year by June, reaching historical highs [4] - The processing fee for zinc concentrate in China has risen to over 3,600 yuan per metal ton, indicating a recovery trend [4] Group 4: Demand Factors - Infrastructure investment remains stable, with significant growth in the electricity sector and a rebound in public facilities, while the transportation sector shows weakness [5] - The real estate market continues to be at a low point, with a declining share of zinc demand expected in 2025 [5] - Automotive production, sales, and exports have shown strong growth, but there are concerns about a potential slowdown in demand in the second half of the year [5] Group 5: Export Trends - Zinc product exports surged in the first half of the year due to U.S. tariff policies, with notable increases in galvanized sheets and zinc alloys [7] - However, as the export rush subsides and tariffs are implemented, there may be downward pressure on exports of primary zinc products [7] - Overall, the zinc market is expected to transition from a tight supply situation to a more relaxed one, with a clearer downward trend in zinc prices anticipated for 2025 [7]

Report Summary Investment Rating - Unilateral: Cautiously bearish. - Arbitrage: Neutral [4] Core View - The downstream has limited restocking behavior despite the decline in absolute prices. The supply is relatively sufficient, and the spot premium is stable. The import ore TC is rising, and the smelting profit is still high, with an expected supply surplus in the second half of the year. Although downstream consumption shows some resilience, it cannot offset the high growth on the supply side, leading to a trend of inventory accumulation, which may suppress zinc prices [3] Key Data Spot Market - LME zinc spot premium is -$5.61 per ton. SMM Shanghai zinc spot price dropped by 30 yuan to 22,150 yuan per ton, with a stable premium of 30 yuan per ton. SMM Guangdong zinc spot price fell by 30 yuan to 22,080 yuan per ton, with a stable premium of -40 yuan per ton. SMM Tianjin zinc spot price declined by 30 yuan to 22,110 yuan per ton, with a stable premium of -10 yuan per ton [1] Futures Market - On July 15, 2025, the SHFE zinc main contract opened at 22,110 yuan per ton and closed at 22,085 yuan per ton, down 120 yuan per ton. Trading volume was 119,038 lots, a decrease of 17,102 lots from the previous day, and the position was 84,304 lots, a reduction of 9,873 lots. The intraday price fluctuated between 22,040 - 22,195 yuan per ton [1] Inventory - As of July 14, 2025, the total inventory of SMM seven - region zinc ingots was 93,100 tons, an increase of 4,000 tons from the previous week. As of July 15, 2025, LME zinc inventory was 118,600 tons, up 5,200 tons from the previous day [2] Market Analysis - In the spot market, the decline in absolute prices fails to stimulate restocking. The supply is sufficient, and the spot premium is stable. The import ore TC is rising, and smelting profits are high, with an expected supply surplus in the second half of the year. Smelters have sufficient raw material inventory and low procurement enthusiasm. Although downstream consumption shows resilience, it cannot offset the high - growth supply, leading to inventory accumulation, which may suppress zinc prices [3] Strategy - Unilateral: Cautiously bearish. - Arbitrage: Neutral [4]

Report Industry Investment Rating - No information provided Core Viewpoints of the Report - Macro: As of July 14, according to CME's "Fed Watch," the probability of the Fed keeping interest rates unchanged in July is 93.3%, and the probability of a 25 - basis - point rate cut is 6.7%. In September, the probability of keeping rates unchanged is 59.7%, the probability of a cumulative 25 - basis - point rate cut is 36.2%, and the probability of a cumulative 50 - basis - point rate cut is 4.1% [5]. - Fundamentals: Driven by anti - involution and meeting expectations, the sentiment in the domestic commodity market is hot, and zinc prices have rebounded and then fluctuated. From a fundamental perspective, the cyclical supply of zinc ore is becoming looser. In 2025, several major zinc ore projects at home and abroad have production increase plans. The recovery of global zinc ore production has led to a continuous strengthening of the marginal spot TC of zinc ore. The increase in ore production is transmitted to the smelting end. With the improvement of smelting profits, the operating rate of domestic smelters has increased, and maintenance has been postponed. The output of refined zinc has marginally recovered, and the increasing production situation at the ore and smelting ends is expected to continue. On the demand side, trade disputes may drag down the global economic growth rate, and there are concerns about a contraction in the total zinc demand. Even if countries quickly reach new trade agreements and the global economic growth rate maintains resilience, there is little expectation of an increase in the total zinc demand, which will mainly remain at the existing level. Whether the demand is estimated to be optimistic or pessimistic, the zinc supply - demand balance tends to be in surplus, putting downward pressure on the long - term zinc price center [5]. - Strategy: In the short and medium term, the short - term sentiment in the domestic commodity market is hot, but there seems to be no clear expectation that can reverse the supply - demand situation, and it has little to do with the fundamentals of zinc. Consider laying out short positions in SHFE zinc on rallies [5]. Summary by Directory Part 1: Core Viewpoints - The macro situation shows different probabilities of the Fed's interest rate decisions in July and September. The fundamentals indicate a shift in the zinc supply - demand balance towards surplus, and the strategy suggests shorting SHFE zinc on rallies [5]. Part 2: Industrial Fundamentals - Supply Side - **Zinc Concentrate Production**: In April 2025, the global zinc concentrate production was 1.0192 million tons, a year - on - year increase of 9.71%. The international long - term contract TC price for zinc ore in 2025 was set at $80/ton, the lowest in history, and it was halved compared to the previous year. However, the long - term TC in 2024 was overestimated, and the trend of a marginally looser zinc ore supply remains unchanged [7]. - **Zinc Concentrate Imports and Processing Fees**: From January to May 2025, China's cumulative imports of zinc concentrate were 2.2055 million physical tons, a year - on - year increase of 52.83%. The increase in imports has boosted processing fees. As of July 11, the processing fee for imported ore was reported at $66.48/ton, and that for domestic ore was reported at 3,800 yuan/ton, with both having been raised several times recently [9]. - **Smelter Profit Estimation**: With the continuous increase in processing fees, smelter profits have been continuously improved [12]. - **Refined Zinc Production**: In April 2025, the global refined zinc output was 1.1384 million tons, a year - on - year increase of 0.52%. In June 2025, China's refined zinc production was 580,000 tons, a year - on - year increase of 6.8%. As profits recover, production is gradually increasing [16]. - **Refined Zinc Import Profit and Import Volume**: From January to May 2025, China's cumulative net imports of refined zinc were 145,400 tons. The import window for refined zinc is currently closed [19]. Part 3: Industrial Fundamentals - Consumption Side - **Initial Consumption of Refined Zinc**: In May 2025, China's galvanized sheet production was 2.34 million tons, a year - on - year increase of 2.63%. The apparent consumption of galvanized products is relatively sluggish, indicating weak actual demand and active destocking of hidden inventories in the industrial chain [24]. - **Terminal Consumption of Refined Zinc**: From January to May 2025, the cumulative year - on - year growth rate of infrastructure investment completion (excluding electricity) has declined. The back - end of the real estate market has improved month - on - month, but front - end indicators such as new construction and construction are still weak [26]. - **Terminal Consumption of Refined Zinc**: In May 2025, China's automobile production was 2.6485 million vehicles, a year - on - year increase of 11.65%. The production and sales of household appliances have cooled down due to the exhaustion of national subsidy funds in some regions, and the impact of subsequent tariffs should be noted [29]. Part 4: Other Indicators - **Inventory**: As the off - season approaches, social inventories of zinc have slightly increased [31]. - **Spot Premium/Discount**: As of July 11, the LME 0 - 3 premium/discount for zinc was reported at a discount of $0.36/ton. As the off - season approaches, the domestic spot premium has declined [34]. - **Exchange Positions**: As of July 4, the net long position of LME zinc investment funds was 20,595 lots. The weighted position of SHFE zinc has recently declined [37].

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Viewpoints of the Report - In the short term, affected by macro - sentiment, zinc prices may fluctuate. With continuous supply expansion and the downstream entering the off - season, domestic social inventories are expected to gradually accumulate, and zinc prices may face downward pressure [4]. - For trading strategies, one can consider short - selling zinc at high prices while being vigilant about macro risks, and temporarily hold off on arbitrage operations [4]. Group 3: Summary According to the Table of Contents Chapter 1: Comprehensive Analysis and Trading Strategies - **Industry Supply and Demand** - **Mine End**: This week, the domestic zinc concentrate market remained stable. The SMM Zn50 domestic weekly TC average price was flat at 3,800 yuan/metal ton, and the SMM imported zinc concentrate index rose by 1 US dollar/dry ton to 66.25 US dollars/dry ton. In July, although some domestic mines were under maintenance, the impact on production was small. Domestic zinc concentrate production is expected to increase, and zinc concentrate processing fees still have room for an upward adjustment [4]. - **Smelting End**: In July, domestic smelters had both maintenance and restart operations. Overall, domestic refined zinc production may increase by about 12,000 tons month - on - month. Recently, the processing fees for domestic zinc concentrates have increased significantly, the profit margins of smelters have expanded, and with sufficient domestic zinc concentrate supply, the enthusiasm of smelters to start production has increased significantly. Refined zinc supply is expected to increase [4]. - **Consumption**: Against the backdrop of the traditional off - season for zinc consumption from July to August, terminal orders have decreased significantly, and the enthusiasm of downstream enterprises to start production has declined. Coupled with the relatively high raw material inventory of downstream enterprises, it is expected that the downstream procurement sentiment will be poor in the near future. However, the continuation of the domestic "trade - in" policy may still boost consumption to some extent. Attention should be paid to the consumption situations in infrastructure, automotive, and home appliance sectors [4]. - **Inventory Data**: As of July 3, the total inventory of SMM seven - region zinc ingots was 82,400 tons, an increase of 2,900 tons from June 26 and an increase of 1,800 tons from June 30. The LME zinc inventory (on July 4) was 112,300 tons, a decrease of 6,900 tons from June 27 [4]. - **Trading Strategies** - **Unilateral Trading**: One can consider short - selling zinc in small quantities at high prices and be vigilant about macro risks. - **Arbitrage**: Temporarily hold off on operations [4]. Chapter 2: Market Data - **Spot Premium**: Information on the basis situation in major consumption regions and LME cash - 3M is provided [6]. - **Absolute Price and Monthly Spread, and Trading Volume and Open Interest of Shanghai Zinc**: Related data on these aspects are presented [12]. - **Social Inventory**: Information on social inventory, bonded area inventory, LME inventory, LME cancelled warrant ratio, warrants, and LME inventory by region is included [14][15]. Chapter 3: Fundamental Data - **Zinc Ore Supply** - **Production**: From January to April, global zinc concentrate production was 393,680 tons, a year - on - year increase of 5.07%. Among them, overseas zinc concentrate production was 274,180 tons, a year - on - year increase of 6.23%, and Chinese zinc concentrate production was 119,500 tons, a year - on - year increase of 2.49%. In May 2025, SMM zinc concentrate production was 325,000 metal tons, a month - on - month increase of 9.17% and a year - on - year increase of 3.17%. In June 2025, the expected zinc concentrate production was 342,600 metal tons, a month - on - month increase of 5.42%. In June, the monthly raw material inventory of smelters was 448,000 metal tons, a month - on - month increase of 6.41% and a year - on - year increase of 99.11%. This week, the zinc concentrate inventory at Lianyungang increased by 10,000 tons to 90,000 physical tons [25]. - **Import**: In May 2025, the imported zinc concentrate was 491,500 tons (physical tons), a month - on - month decrease of 0.63% and a year - on - year increase of 84.26%. From January to May, the cumulative imported zinc concentrate was 2,204,000 tons (physical tons), a cumulative year - on - year increase of 52.46%. The top three import source countries were Australia (22.10%), Peru (16.13%), and South Africa (10.49%). From June to July, the import window for zinc concentrates was basically closed, and although some previously locked - price imported ores flowed in, the volume of imported zinc concentrates was expected to decrease compared with the previous period [33]. - **Total Domestic Ore Supply**: In May 2025, the total domestic supply of zinc concentrates was about 546,200 metal tons, a year - on - year increase of 25.74%. From January to May, the cumulative total supply was 2,390,100 metal tons, a cumulative year - on - year increase of 13.99%. According to SMM data, in June 2025, the available days of inventory for refined zinc production enterprises were 29.7 days, an increase of 2 days month - on - month and 12.83 days more than the same period last year [36]. - **Zinc Ore Processing Fees**: In July, the monthly processing fee for domestic Zn50 zinc concentrates rose to 3,850 yuan/ton, an increase of 2,250 yuan/ton compared with December 2024. On July 4, the weekly processing fee for domestic Zn50 zinc concentrates was 3,800 yuan/ton, and the SMM imported zinc concentrate index rose by 1 US dollar/dry ton to 66.25 US dollars/dry ton. Currently, the profit of domestic mines is about 4,088 yuan/ton, domestic smelters have a production loss of about 228 yuan/ton (excluding by - product revenue), and with by - product revenue, smelters have a profit of about 1,477 yuan/ton [39][40]. - **Global Refined Zinc Production** - In the first half of last year, the global zinc market was in surplus, but since July, it has turned into a shortage. In 2024, the annual refined zinc production was 1,362.02 million tons, a cumulative year - on - year decrease of 2.01%. The annual demand was 1,364.78 million tons, a cumulative year - on - year decrease of 0.32%. The annual refined zinc shortage was 27,600 tons. - From January to April 2025, global refined zinc production was 442,580 tons, a year - on - year decrease of 10,550 tons or 2.33%. The main production cuts were concentrated in South Korea and Japan, mainly due to the reduction and suspension of production at South Korea's Seakpho smelter and Japan's Annaka smelter. - From January to April 2025, global refined zinc consumption was 427,470 tons, a year - on - year decrease of 6,390 tons or 1.47%. The decrease in consumption was concentrated in the United States and Mexico, mainly due to geopolitical risks and macro - economic uncertainties. - From January to April 2025, the global refined zinc cumulative surplus was 151,100 tons, and the surplus was gradually expanding [43]. - **Domestic Refined Zinc Supply** - **Smelter Operation**: From January to June, the average operating rate of domestic refined zinc enterprises was about 88.4%, a year - on - year increase of 2.3%. By scale, the operating rate of large - scale refined zinc enterprises was 89.3%, a year - on - year increase of 0.8%; that of medium - scale enterprises was 93.8%, a year - on - year increase of 4.8%; and that of small - scale enterprises was 71.2%, a year - on - year increase of 0.54%. In January and February this year, the operating rate of domestic smelters was lower than the same period last year, mainly due to smelter losses and the Spring Festival holiday. Since March, after smelters turned profitable, the operating rate has increased significantly year - on - year. - **Production**: From January to June, domestic refined zinc production was 3.24 million tons, a year - on - year increase of 1.84%. In the first half of 2024, domestic smelters were profitable, and with relatively sufficient raw material inventory, domestic production was relatively stable. In the second half of 2024, due to ore shortages and reduced processing fees, smelters turned to losses, and the scale of production cuts continued to expand. This year, domestic smelters' production gradually increased after turning profitable in March, so the year - on - year increase in production in the first half of the year was not significant [46]. - **Zinc Ingot Import**: In May 2025, the imported refined zinc was 26,700 tons, a month - on - month decrease of 1,500 tons or 5.36% and a year - on - year decrease of 39.85%. From January to May, the cumulative imported refined zinc was 155,900 tons, a cumulative year - on - year decrease of 16.66%. In May, the exported refined zinc was 1,400 tons, and the net imported refined zinc was 25,300 tons. The top three import countries in May were Kazakhstan (15,600 tons, 58.7%), Australia (3,600 tons, 13.56%), and Spain (2,800 tons, 10.57%). From June to July, the domestic refined zinc import window was basically closed. Although some previously locked - price imported zinc and duty - free imported zinc flowed in, the volume was expected to be significantly reduced compared with the previous period [48]. - **Downstream Consumption - Related Data** - **Primary Processing**: Information on the start - up situation and inventory of primary processing enterprises, including galvanizing, zinc alloy, and zinc oxide enterprises, is provided [57][59]. - **Real Estate Construction**: Data on real estate development investment, sales area, new construction area, construction area, completion area, and unsold area are presented, along with the seasonal data of the 100 - city land transaction premium rate and the daily transaction data of commercial housing in 30 large - and medium - sized cities [62][64]. - **Infrastructure Investment**: Trends in major infrastructure investment sectors, including power, transportation, and water conservancy, are provided [71]. - **Domestic Automobile**: Data on automobile production, including traditional fuel vehicles and new - energy vehicles, and export seasonality are presented [75][76]. - **Domestic White Goods**: Data on the monthly production of air conditioners, refrigerators, and washing machines are provided [78]. - **Raw Material Supply and Demand Summary Table**: The table shows the production, net import volume, and total supply of zinc concentrates and refined zinc from January 2024 to May 2025, including year - on - year changes [56].

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Viewpoints of the Report - **Macro aspect**: On July 3rd, the U.S. Bureau of Labor Statistics showed that non - farm payrolls increased by 147,000 in June, with an expected increase of 110,000, and the unemployment rate dropped to 4.1%, expected to be 4.3%. After the release of non - farm data, the probability of a Fed rate cut in July dropped to single - digits [6]. - **Fundamental aspect**: The non - ferrous sector remained relatively strong. Last week, the zinc price fluctuated above 22,000. Processing fees continued to rise, and domestic smelter output was expected to increase. The supply of zinc ore was becoming more abundant cyclically. In 2025, several major zinc mines planned to increase production, driving up the global zinc ore output and strengthening the spot TC of zinc ore. The increase in the mine end was transmitted to the smelting end. With the improvement of smelting profits, domestic smelter operating rates increased, and maintenance was postponed. Refined zinc output gradually recovered, and this trend was expected to continue. On the demand side, trade disputes might drag down the global economic growth rate, and there were concerns about a contraction in the total zinc demand. Even if new trade agreements were quickly reached and the global economic growth rate remained resilient, there was no expectation of an increase in the total zinc demand, mainly maintaining the status quo. Whether the demand was estimated optimistically or pessimistically, the zinc supply - demand balance tended to be in surplus, putting downward pressure on the long - term zinc price [6]. - **Strategy aspect**: In the short and medium term, the rebound of the zinc price was mainly driven by the overall sentiment of the sector and commodities, with little change in its own fundamentals. The recent strength of non - ferrous metals was mainly due to regional premiums caused by tariffs, not an indication of the strengthening of the global manufacturing industry. Therefore, the sustainability of the zinc price rebound was expected to be limited, and it was advisable to consider shorting at high prices [6]. Group 3: Summary of Each Section in the Report 3.1 Industry Fundamental - Supply Side - **Zinc concentrate output**: In April 2025, the global zinc concentrate output was 1.0192 million tons, a year - on - year increase of 9.71%. The international long - term contract TC price for zinc ore in 2025 was set at $80/ton, the lowest in history and half of the previous year. Overseas high - cost smelters might face operational pressure. However, the long - term contract TC in 2024 was overestimated, and the trend of looser zinc ore supply remained unchanged [8]. - **Zinc concentrate imports and processing fees**: From January to May 2025, China's cumulative imports of zinc concentrate reached 2.2055 million physical tons, a year - on - year increase of 52.83%. The increase in imports boosted the processing fees. As of July 4th, the processing fee for imported zinc ore was reported at $66.25/ton, and that for domestic zinc ore was reported at 3,800 yuan/ton. Both domestic and imported ore processing fees had been raised several times recently [11]. - **Smelter profit estimation**: With the continuous increase in processing fees, smelter profits had been continuously improved [14]. - **Refined zinc output**: In April 2025, the global refined zinc output was 1.1384 million tons, a year - on - year increase of 0.52%. In June 2025, China's refined zinc output was 580,000 tons, a year - on - year increase of 6.8%. As profits recovered, output was gradually increasing [18]. - **Refined zinc import profit and import volume**: From January to May 2025, China's cumulative net imports of refined zinc were 145,400 tons. The refined zinc import window was currently closed [21]. 3.2 Industry Fundamental - Consumption Side - **Initial consumption of refined zinc**: In May 2025, China's galvanized sheet output was 2.34 million tons, a year - on - year increase of 2.63%. The apparent consumption of galvanized products was relatively low, indicating weak actual demand and active destocking of hidden inventories in the industrial chain [26]. - **Terminal consumption of refined zinc - Part 1**: From January to May 2025, the cumulative year - on - year growth rate of infrastructure investment completion (excluding electricity) declined. The back - end of the real estate market improved month - on - month, but front - end indicators such as new construction and construction remained weak [28]. - **Terminal consumption of refined zinc - Part 2**: In May 2025, China's automobile output was 2.6485 million vehicles, a year - on - year increase of 11.65%. In some regions, the national subsidy funds were exhausted, and the production and sales of home appliances cooled down. Attention should be paid to the impact of subsequent tariffs [31]. 3.3 Other Indicators - **Inventory**: As the off - season approached, social inventories of zinc increased slightly [33]. - **Spot premium/discount**: As of July 4th, the LME 0 - 3 premium/discount for zinc was reported at a discount of $21.64/ton. With the arrival of the off - season, the domestic spot premium declined [36]. - **Exchange positions**: As of June 27th, the net long position of LME zinc investment funds was 17,814 lots. The weighted position of SHFE zinc increased significantly [39].

Investment Rating - Unilateral: Cautiously bearish. Arbitrage: Neutral [4] Core View - The continuous weakening of the US dollar has led to generally strong commodity prices. A strike at a 344,000 - ton zinc smelter in Peru has affected production and boosted zinc prices. However, the spot market has become increasingly冷清, with a significant decline in spot premiums. The operating rate of zinc alloy has dropped significantly, and there may be a negative feedback from hidden inventory. Although the upward space is limited, the zinc price still maintains a strong trend. Consumption shows a marginal decline, and if social inventory continues to increase, it will exert significant downward pressure [3] Summary by Category Important Data - **Spot**: The LME zinc spot premium is -$17.39/ton. SMM Shanghai zinc spot price rose by 60 yuan/ton to 22,260 yuan/ton, with the premium dropping by 65 yuan/ton to 185 yuan/ton. SMM Guangdong zinc spot price rose by 90 yuan/ton to 22,220 yuan/ton, with the premium dropping by 35 yuan/ton to 145 yuan/ton. SMM Tianjin zinc spot price rose by 50 yuan/ton to 22,190 yuan/ton, with the premium dropping by 75 yuan/ton to 115 yuan/ton [1] - **Futures**: On June 26, 2025, the main SHFE zinc contract opened at 22,090 yuan/ton and closed at 22,240 yuan/ton, up 275 yuan/ton. The trading volume was 168,109 lots, an increase of 9,578 lots, and the open interest was 135,638 lots, an increase of 5,773 lots. The intraday price fluctuated between 22,030 - 22,400 yuan/ton [1] - **Inventory**: As of June 26, 2025, the total SMM seven - region zinc ingot inventory was 79,500 tons, a decrease of 100 tons from last week. The LME zinc inventory was 119,850 tons, a decrease of 3,025 tons from the previous trading day [2] Market Analysis - The weakening US dollar and the strike at a Peruvian zinc smelter have pushed up zinc prices. However, the spot market is cold, with a significant decline in premiums. The operating rate of zinc alloy has dropped, and there may be a negative feedback from hidden inventory. TC remains stable, and overseas zinc ore shipments are increasing. Although the upward space is limited, the strong trend remains. There is still smelting profit, and the smelting enthusiasm is high, so the supply pressure remains. Consumption shows a marginal decline, and the increase in social inventory will bring downward pressure [3] Strategy - Unilateral: Cautiously bearish. Arbitrage: Neutral [4]

Supply Overview - In April 2025, global zinc mine production reached 1.0722 million tons, marking a year-on-year increase of 7% and a month-on-month increase of 6.4% [1] - From January to April 2025, global zinc mine production totaled 4.0406 million tons, with a cumulative year-on-year growth of 2% [1] - Major overseas mines reported varying production levels in Q1, with total output from these mines amounting to 869,000 tons, reflecting a year-on-year increase of 5.5% but a month-on-month decrease of 1.5% [1][2] - Domestic zinc concentrate production in Q1 saw a year-on-year increase of 6.42% [1] Demand Overview - In April, global zinc consumption was 1.1302 million tons, showing a year-on-year increase of 1% and a month-on-month increase of 6% [3] - The downstream consumption index for zinc fell to 56.36% in May, a decrease of 1.7 percentage points, indicating a slowdown in demand [3] - The PMI for various downstream industries, including galvanizing and die-casting, showed values below 50, indicating contraction in these sectors [3] Price and Profitability Insights - The main zinc contract on the Shanghai Futures Exchange faced pressure at the 23,000 yuan/ton level, with a recent low of 21,660 yuan/ton [1] - Domestic zinc concentrate producers are experiencing significant losses, with import losses reaching up to -572 yuan/ton, leading to a closure of import windows [1][2] - Despite the losses, domestic production profits remain substantial, estimated between 3,900 to 4,600 yuan/ton [1] Inventory and Market Dynamics - As of June 24, LME zinc inventories decreased by 49% year-on-year to 123,000 tons, with a month-on-month decline of 18% [4] - The Shanghai Futures Exchange's zinc warehouse receipts fell by 91% year-on-year to 7,471 tons, indicating a tightening supply [4] - Domestic zinc ingot inventory stood at 58,400 tons, reflecting a year-on-year decrease of 7% [4] Future Outlook - The combination of increased global zinc concentrate supply and seasonal demand weakness is expected to suppress zinc prices [5] - However, refining zinc prices may find support from smelting costs, import costs, and ongoing inventory reductions [5] - Potential positive developments in US-China tariff negotiations and a gradual recovery from the consumption off-season could lead to a rebound in zinc prices [5]