Report Summary 1. Report Industry Investment Rating No information provided 2. Core View of the Report The zinc ingot social inventory is steadily declining, showing a seasonal destocking trend. The downstream operating rate remains stable. The spot discount in Guangdong has been significantly repaired. The narrowing of the spread between near - month contracts is due to reduced spot supply. The TC of the mining end continues to decline, the smelter's losses expand, the raw material inventory decreases, and the smelting output declines, alleviating the supply pressure. The fundamental data has turned from bearish to bullish, the zinc valuation is low, and there is optimism about future consumption with unchanged interest - rate cut expectations and un - realized re - inflation [5]. 3. Summary by Relevant Catalogs Important Data - **Spot**: The LME zinc spot premium is $158.52 per ton. The SMM Shanghai zinc spot price increased by 40 yuan/ton to 23,110 yuan/ton, with a spot premium and discount of 65 yuan/ton; the SMM Guangdong zinc spot price increased by 40 yuan/ton to 23,030 yuan/ton, with a spot premium and discount of - 15 yuan/ton; the Tianjin zinc spot price increased by 40 yuan/ton to 23,000 yuan/ton, with a spot premium and discount of - 45 yuan/ton [2]. - **Futures**: On December 11, 2025, the main SHFE zinc contract opened at 23,050 yuan/ton, closed at 22,995 yuan/ton, down 70 yuan/ton from the previous trading day. The trading volume was 93,062 lots, and the open interest was 88,499 lots. The highest price during the day was 23,095 yuan/ton, and the lowest was 22,920 yuan/ton [3]. - **Inventory**: As of December 11, 2025, the total inventory of zinc ingots in seven regions monitored by SMM was 128,200 tons, a decrease of 7,800 tons from the previous period. As of the same date, the LME zinc inventory was 60,350 tons, an increase of 550 tons from the previous trading day [4]. Market Analysis The zinc ingot social inventory is in a continuous and stable decline, showing a seasonal destocking trend. The downstream operating rate remains stable. The significant repair of the spot discount in Guangdong, cautious downstream purchasing, and active selling by traders. The narrowing of the spread between near - month contracts is due to reduced spot market supply. The continuous decline of TC at the mining end, the expansion of smelter losses, the decrease in raw material inventory, the high purchasing enthusiasm, the expected continuous decline of TC, the obvious decline in smelting enthusiasm, and the significant decline in smelting output have alleviated the supply pressure. The fundamental data has changed from bearish to bullish, the zinc valuation is low, there is optimism about future consumption, the interest - rate cut expectation remains unchanged, and re - inflation has not been reflected [5]. Strategy - **Single - side trading**: Cautiously bullish. - **Arbitrage**: Inter - period positive spread arbitrage [6]

Group 1 - In June 2025, China's nickel pig iron production was 23,300 tons, with a month-on-month decrease of 2.87% and a year-on-year decrease of 7.35% [2] - The production of medium and high nickel pig iron was 16,700 tons, down 4.17% month-on-month and down 13.51% year-on-year, while low nickel pig iron production increased by 0.53% month-on-month to 6,700 tons, up 12.68% year-on-year [2] - From January to June 2025, China's total nickel pig iron production was 138,000 tons, a year-on-year decrease of 5.06%, with medium and high nickel pig iron accounting for 100,900 tons, down 9.04% year-on-year [2] Group 2 - In June 2025, the combined nickel pig iron production from China and Indonesia was 174,700 tons, reflecting a month-on-month decrease of 3.85% but a year-on-year increase of 22.21% [5] - The medium and high nickel pig iron production from both countries was 168,100 tons, down 4.01% month-on-month but up 22.62% year-on-year [5] - From January to June 2025, the total nickel pig iron production from China and Indonesia reached 1,040,700 tons, a year-on-year increase of 19.31%, with medium and high nickel pig iron production at 1,003,600 tons, up 20.27% year-on-year [5] Group 3 - As of June 30, 2025, Indonesia's nickel pig iron production was 151,400 tons, down 3.99% month-on-month but up 28.52% year-on-year [6] - From January to June 2025, Indonesia's total nickel pig iron production was 902,700 tons, a year-on-year increase of 24.77% [6] Group 4 - In Indonesia, the phenomenon of cost inversion among mainstream smelting plants has become common, with some production lines halting operations due to high cost pressures [8] - The production enthusiasm among smelting plants is low due to declining finished product prices, and some production lines may consider maintenance due to weak demand from downstream stainless steel [8] - It is expected that Indonesia's nickel pig iron production may further weaken in July due to ongoing high costs and reduced production capacity [8]