Core Viewpoint - Oil prices are expected to decline this year and early next year as geopolitical risk premiums decrease, with Brent crude potentially falling to the low $50s per barrel during the holiday season, before recovering to around $65 per barrel by the second half of next year [1][2]. Group 1: Market Dynamics - Despite expectations of an oversupply in the oil market by 2025, this situation has not yet materialized, with strong short-term demand indicated by the persistent "contango" in the market [2]. - As of October 13, Brent crude spot prices were assessed at $64.23 per barrel, significantly down from over $80 per barrel in January [2]. - Key factors contributing to market resilience include geopolitical "panic factors" from conflicts in the Middle East and Europe, as well as low oil inventories in developed countries [2]. Group 2: China's Role - China is seen as an exception in the oil market, with ongoing strategic oil reserve accumulation providing support [3]. - Although oil inventories in Western developed countries remain low, surplus crude is primarily flowing to China, which may serve as a "floating storage" for unsold oil from Iran and Venezuela [3]. - Demand for gasoline and diesel in China has plateaued, influenced by the trend towards electrification, despite growth in petrochemical demand [3]. Group 3: Supply Trends - Oil prices are currently in a downward trend, with more crude entering the market in the second half of the year due to steady increases in OPEC+ production and rising output from non-OPEC countries like Guyana, Norway, and Brazil [4]. - Since April, OPEC+ has announced multiple rounds of production increases [4]. Group 4: Risk Premiums - The oil market has been characterized by geopolitical risk premiums throughout the year, but these premiums are gradually dissipating as the market's ability to cope with geopolitical shocks improves [5]. - Recent developments, such as a peace agreement between Israel and Hamas, have not fully resolved ongoing conflicts like the Russia-Ukraine situation, which continues to impact energy markets [5][6]. - There is a possibility that the market may be underestimating the likelihood of sudden supply disruptions from key oil-producing countries like Iran, Venezuela, and Russia, which are currently facing unstable conditions [7].

Industry Summary - The London Metal Exchange (LME) zinc market is experiencing one of the most severe squeezes in decades, with traders competing for dwindling inventories, pushing spot zinc prices to their highest premium levels in over 20 years [1] - The premium of spot zinc over three-month contracts has surged to $323 per ton, marking the highest level since at least 1997, indicating strong spot demand exceeding immediate supply [1] - Despite ongoing supply pressures domestically, fundamental factors are showing marginal changes, with macro data trending upwards, suggesting a potential halt in zinc price declines [1] - There are emerging risks in overseas warehouse receipts, and the opening of zinc ingot export windows may lead to lower-than-expected domestic inventory accumulation, which could be a bullish factor if seasonal inventory declines occur [1] - The development of new energy and infrastructure investments is driving actual consumption, with estimated zinc consumption growth potentially reaching 5%, further supported by the integration of smelting and zinc alloy production [1] Company Summary - Luoping Zinc & Electricity Co., Ltd. focuses on the mining, selection, and smelting of lead and zinc ores, with a zinc metal output of approximately 1.1 million tons [2] - Weiling Co., Ltd. acquired a 74.3% stake in Jiayu Mining in May, which holds a mining license for a 30,000-ton annual production capacity of various non-ferrous metals, including tungsten, tin, lead, and zinc [2]

Core Viewpoint - The London Metal Exchange (LME) zinc market is experiencing one of the most severe supply squeezes in decades, leading to a continuous rise in spot zinc prices for three consecutive days, with significant pressure on short sellers to cover positions or deliver physical metal [1][3]. Group 1: Supply and Demand Dynamics - Spot zinc prices have increased by 0.37% to $2,999 per ton, marking a third consecutive day of price rise [1]. - The premium of spot zinc over three-month contracts has surged to $323 per ton, the highest level in over 20 years, indicating that spot demand exceeds immediate supply [1]. - LME warehouse zinc inventory has plummeted to 24,425 tons, which is insufficient to meet even one day's demand in a global market with an annual consumption of 14 million tons [3][4]. Group 2: Market Pressure and Positioning - The significant long positions held by six independent entities correspond to at least three times the available inventory in the LME warehouse, putting short sellers in a precarious position [5]. - The Tom/next price spread, reflecting the cost of rolling over contracts, reached $30 per ton, the highest since 2022, indicating tight market conditions [3]. - Analysts suggest that the inability of LME inventories to attract new metal inflows may necessitate exports from China to alleviate short-term market pressures [4]. Group 3: Market Sentiment and Trends - The current market dynamics are characterized by a delicate balance, with low inventory levels making the market susceptible to shocks [4]. - The overall metal market is experiencing moderate movements, influenced by changes in trade outlook and uncertainty regarding risk assets, with copper prices slightly declining [6].

Group 1: Hot News - European leaders issued a joint statement supporting a ceasefire in the Russia-Ukraine conflict through negotiations, endorsing Trump's proposal of an immediate ceasefire and using the current contact line as the starting point for talks, and reaffirming that international borders should not be changed by force [2] - From October 1 - 20, 2025, Malaysia's palm oil yield per unit area increased by 1.45% month-on-month, the oil extraction rate increased by 0.24% month-on-month, and production increased by 2.71% month-on-month [2] - In 2026, the total tariff-rate quota for fertilizer imports in China is 13.65 million tons, including 3.3 million tons of urea [2] - Rio Tinto has stockpiled about 2 million tons of high-grade iron ore at the Simandou project in Guinea and will ship it in mid - November. WCS, which operates another Simandou iron mine, started hoarding ore in September. Simandou is expected to produce 120 million tons of iron ore annually at full capacity [2] - The zinc market on the London Metal Exchange (LME) is facing its worst supply squeeze in decades, with the premium of spot zinc over three - month futures soaring to $323 per ton, the highest since at least 1997 [3] Group 2: Sector Performance - Key sectors to focus on are urea, lithium carbonate, silver, crude oil, and PP [4] - In the holiday overseas market, the night - session price changes of commodity futures main contracts show that non - metallic building materials rose 2.96%, precious metals 31.40%, oilseeds and oils 10.12%, soft commodities 2.71%, non - ferrous metals 20.62%, coal, coke, and steel ore 13.02%, energy 3.05%, chemicals 11.31%, grains 1.15%, and agricultural and sideline products 3.67% [4] Group 3: Sector Positions - The chart shows the changes in commodity futures sector positions in the past five days, including Wind agricultural and sideline products, Wind grains, Wind chemicals, Wind energy, Wind coal, coke, and steel ore, Wind non - ferrous metals, Wind commodity composites, Wind soft commodities, Wind oilseeds and oils, Wind precious metals, and Wind non - metallic building materials [5] Group 4: Performance of Major Asset Classes - In the equity category, the Shanghai Composite Index rose 1.36%, the SSE 50 rose 1.09%, the CSI 300 rose 1.53%, the CSI 500 rose 1.64%, the S&P 500 was flat, the Hang Seng Index rose 0.65%, the German DAX rose 0.29%, the Nikkei 225 rose 0.27%, and the UK FTSE 100 rose 0.25% [6] - In the fixed - income category, the 10 - year Treasury bond futures rose 0.05%, the 5 - year Treasury bond futures rose 0.05%, and the 2 - year Treasury bond futures rose 0.04% [6] - In the commodity category, the CRB commodity index fell 0.36%, WTI crude oil rose 0.96%, London spot gold fell 5.31%, LME copper fell 0.89%, and the Wind commodity index rose 1.99% [6] - In other categories, the US dollar index rose 0.35%, and the CBOE volatility index was flat [6]

Report Summary 1. Report Industry Investment Rating - No investment rating provided in the report 2. Core Viewpoints - The zinc market shows external support, with the LME zinc market facing a severe squeeze due to Western smelter production cuts and depleting inventories, leading to a significant increase in the spot premium [2] - The zinc trend strength is neutral, with a value of 0 [3] 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - **Prices**: The closing price of SHFE zinc main contract was 21,970 yuan/ton, up 0.55%; the LME zinc 3M electronic disk closed at 2,976 dollars/ton, up 1.24% [1] - **Volumes and Positions**: The trading volume of SHFE zinc main contract was 108,521 lots, an increase of 10,835 lots; the LME zinc trading volume was 8,609 lots, a decrease of 2,492 lots. The open interest of SHFE zinc main contract was 130,442 lots, an increase of 5,270 lots; the LME zinc open interest was 224,013 lots, a decrease of 200 lots [1] - **Premiums and Discounts**: The premium of Shanghai 0 zinc was -50 yuan/ton, a decrease of 10 yuan/ton; the LME CASH - 3M premium was 230.29 dollars/ton, an increase of 100.29 dollars/ton [1] - **Inventories**: SHFE zinc futures inventory was 66,268 tons, a decrease of 151 tons; LME zinc inventory was 37,275 tons, a decrease of 50 tons [1] 3.2 News - **LME Zinc "Squeeze"**: The LME zinc market is experiencing its most severe squeeze in decades, with available zinc inventories less than one - day's demand and the spot premium soaring to the highest level since 1997 [2] - **Russia - Ukraine Process**: The preparation for the "Trump - Putin meeting" has encountered obstacles, and the call for an "immediate cease - fire" by European countries has created uncertainty for the meeting [2][3] 3.3 Trend Strength - The zinc trend strength is 0, indicating a neutral outlook [3]

Core Viewpoint - The London Metal Exchange (LME) zinc market is experiencing one of the most severe squeezes in decades, with traders scrambling for dwindling inventories, pushing spot zinc prices to their highest premium levels in over 20 years [1][3]. Group 1: Market Dynamics - The premium of spot zinc over three-month contracts has surged to $323 per ton, marking the highest level since at least 1997, indicating a typical sign of spot demand exceeding immediate supply [1][3]. - Traders are rapidly purchasing remaining inventories, with six independent entities holding large long positions that correspond to at least three times the immediately available inventory in the LME storage system [3][4]. - The significant long positions put pressure on short sellers, who may face substantial losses if unable to deliver physical metal [4]. Group 2: Inventory Situation - LME zinc inventories have plummeted to near historical lows due to production cuts by Western smelters following a collapse in processing profits, with only 24,425 tons available for buyers, insufficient to meet even one day's demand in a global market consuming 14 million tons annually [4]. - The current low inventory levels create a fragile balance in the market, making it susceptible to shocks, as noted by industry experts [4]. Group 3: Price Discrepancies and Export Opportunities - The disparity in zinc prices between the LME and the Shanghai Futures Exchange (SHFE) has prompted some Chinese smelters to plan exports, which may provide short-term relief for buyers in the LME market, although it may not fundamentally resolve the inventory shortage [5].

格隆汇10月21日｜伦敦金属交易所(LME)锌市场正面临数十年来最严重的供应紧缩，交易商争相抢购支 撑交易所合约的持续萎缩库存。现货锌价较三个月期货合约的溢价飙升至每吨323美元，创下至少自 1997年以来最高水平。这一"现货升水"现象是现货需求超过供应的典型标志。随着西方多家炼厂因加工 费暴跌而减产，LME仓库库存已骤降至2023年创纪录的低点附近，买家压力持续累积数月。目前LME 仓库中仅剩24425吨锌可供提取——这甚至不足以满足全球1400万吨年消费量市场一日之需。现货与三 个月期锌价差飙升之际，LME数据显示交易商正疯狂争夺剩余库存。有六家独立机构持有LME库存多 单及未来两日内到期合约，其总持仓规模相当于LME仓库立即可用库存量的至少300%。另一方面，现 货升水可能使无实物交割能力的空头面临巨额亏损。 ...

Core Insights - Gold and silver prices have reached historical highs due to factors such as the U.S. government shutdown, trade tensions, and expectations of interest rate cuts by the Federal Reserve [1][6][8] Group 1: Gold Market Dynamics - Gold prices have surged approximately 60% since the beginning of the year, with spot gold reaching over $4,290 and COMEX December futures rising about 2.5% [1][6] - Analysts predict that the Federal Reserve is highly likely to cut interest rates by 25 basis points in both October and December, with probabilities of 98% and 95% respectively [6] - Bank of America has raised its 2026 gold price target to $5,000 per ounce, citing policy uncertainty and structural supply shortages as key drivers [6][8] Group 2: Silver Market Conditions - Silver prices have also seen significant increases, with COMEX December futures breaking $53.60, reflecting a daily gain of about 4.4% [3][11] - The silver market is facing severe supply shortages, with inventories down by one-third since 2021, leading to a rare phenomenon of spot silver trading at a premium [6][11] - Bank of America has set a 2026 silver price target of $65, despite an expected 11% decline in physical demand [11] Group 3: Investment Trends and Sentiment - The demand for safe-haven assets like gold is increasing due to heightened geopolitical tensions and economic uncertainties, prompting investors to seek stability [7][10] - Analysts suggest that gold is being viewed not only as an inflation hedge but also as a safeguard against the financial system itself, especially in light of the U.S. weaponizing the dollar [10] - The current bullish trend in gold is supported by strong institutional and retail investor demand, with prices rising approximately 15% in the past month [10]

Core Insights - A rare short squeeze is occurring in the silver market, with physical silver inventories in London reaching critically low levels [1][7] Group 1: Silver Market Dynamics - Spot silver prices have surged, reaching $53.23 per ounce, surpassing the previous high of $50 per ounce set in January 1980 [2] - Year-to-date, spot silver has increased over 70%, significantly outpacing gold's 50% rise [3] - The total inventory of silver in London has decreased by one-third since mid-2021, with "free float" silver dropping from 850 million ounces in mid-2019 to approximately 200 million ounces, a reduction of 75% [5] Group 2: Supply and Demand Imbalance - Current physical demand for silver far exceeds supply, with borrowing rates for silver skyrocketing above 100% [7] - The London Bullion Market Association (LBMA) is reportedly struggling to deliver sufficient physical silver to meet the demand for spot contracts, leading to significant market distortions [7] - Traders are even booking air freight to transport physical silver to London, indicating a severe liquidity crunch in the silver market [7] Group 3: Price Forecasts - Bank of America has raised its price forecasts for precious metals, predicting gold will reach $5,000 per ounce by 2026 and silver will hit $65 per ounce [8][9] - The bank attributes the expected price increases to the unconventional fiscal and monetary policies of the U.S. government, which are likely to keep real interest rates low and pressure the dollar [9]

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - The report indicates that on the supply side, zinc ore imports at home and abroad have increased, zinc ore processing fees have continued to rise, and the price of sulfuric acid has risen significantly, leading to further repair of smelter profits and increased production enthusiasm. With the release of new production capacity and the resumption of previously overhauled capacity, supply growth has accelerated. Currently, import losses continue to widen, leading to a decrease in the inflow of imported zinc. - On the demand side, the downstream is at the end of the off - season. The inventory pressure of galvanized sheets is not significant, and the operating rate of processing enterprises shows a stable upward trend. Recently, zinc prices have rebounded, and downstream buyers maintain on - demand procurement, resulting in a dull trading atmosphere. Domestic social inventories have increased, and the spot premium remains low. Overseas, LME inventories have decreased significantly, and the spot premium has risen, supporting zinc prices. - Technically, positions are stable while prices are rising, with a cautious bullish sentiment. Attention should be paid to the support at the 22,200 mark. It is recommended to wait and see for now or go long lightly on dips [3]. 3. Summary by Relevant Catalogs 3.1 Futures Market - The closing price of the main Shanghai zinc futures contract is 20,310 yuan/ton, up 5 yuan/ton compared to the previous period. The spread between the October - November contracts of Shanghai zinc is - 5 yuan/ton, up 15 yuan/ton. - The LME three - month zinc quotation is 2,956 US dollars/ton, up 51 US dollars/ton. The total open interest of Shanghai zinc is 221,751 lots, a decrease of 1,484 lots. - The net position of the top 20 in Shanghai zinc is - 7,939 lots, a decrease of 47 lots. The Shanghai zinc warehouse receipts are 51,371 tons, an increase of 5,466 tons. - The SHFE inventory is 94,649 tons, an increase of 7,617 tons; the LME inventory is 50,525 tons, a decrease of 100 tons [3]. 3.2 Spot Market - The spot price of 0 zinc on the Shanghai Non - Ferrous Metals Network is 22,230 yuan/ton, unchanged from the previous period. The spot price of 1 zinc in the Yangtze River Non - Ferrous Metals Market is 22,220 yuan/ton, unchanged. - The basis of the main ZN contract is - 80 yuan/ton, a decrease of 5 yuan/ton. The LME zinc premium (0 - 3) is 30.17 US dollars/ton, an increase of 7.67 US dollars/ton. - The factory price of 50% zinc concentrate in Kunming is 16,950 yuan/ton, an increase of 20 yuan/ton. The price of 85% - 86% crushed zinc in Shanghai is 15,600 yuan/ton, unchanged [3]. 3.3 Upstream Situation - According to WBMS, the zinc supply - demand balance is - 124,700 tons, a decrease of 104,100 tons. According to ILZSG, the zinc supply - demand balance is - 69,100 tons, an increase of 10,400 tons. - ILZSG's global zinc mine production in the current month is 1.0075 million tons, a decrease of 4,300 tons. Domestic refined zinc production is 617,000 tons, a decrease of 11,000 tons. - Zinc ore imports are 455,900 tons, an increase of 124,900 tons [3]. 3.4 Industry Situation - Refined zinc imports are 35,156.02 tons, a decrease of 22,615.39 tons. Refined zinc exports are 483.88 tons, an increase of 266.83 tons. - Zinc social inventory is 144,100 tons, an increase of 4,000 tons [3]. 3.5 Downstream Situation - The monthly output of galvanized sheets is 2.32 million tons, a decrease of 130,000 tons. The monthly sales volume of galvanized sheets is 2.34 million tons, a decrease of 120,000 tons. - The monthly new housing construction area is 352.06 million square meters, an increase of 48.4168 million square meters. The monthly housing completion area is 250.34 million square meters, an increase of 24.6739 million square meters. - The monthly automobile production is 2.51 million vehicles, a decrease of 298,600 vehicles. The monthly air - conditioner production is 19.6788 million units, an increase of 3.4764 million units [3]. 3.6 Option Market - The implied volatility of at - the - money call options for zinc is 13.33%, an increase of 0.12 percentage points. The implied volatility of at - the - money put options for zinc is 13.34%, an increase of 0.13 percentage points. - The 20 - day historical volatility of at - the - money zinc options is 6.3%, a decrease of 0.01 percentage points. The 60 - day historical volatility of at - the - money zinc options is 11.05%, a decrease of 0.01 percentage points [3]. 3.7 Industry News - In August 2025, new RMB loans were 59 billion yuan, 31 billion yuan less than the same period last year. The incremental social financing in August was 2.57 trillion yuan, 460 billion yuan less than the same period last year. The year - on - year growth rate of M1 in August was 6.0%, and that of M2 was 8.8%. - Morgan Stanley expects the Fed to cut interest rates by 25 basis points at each of the remaining three meetings this year, and another three times in 2026. According to FedWatch, there is a 93.4% probability that the FOMC will cut interest rates by 25 basis points this week, with a very small possibility of a 50 - basis - point cut [3].