Report Industry Investment Rating - Not provided in the report Core Viewpoints - The market trading theme revolves around the overseas interest - rate cut cycle and the expectation of manufacturing recovery, with a warm risk preference. The fundamental situation is a mix of long and short factors. In the short term, zinc prices are expected to fluctuate strongly supported by macro - bullish sentiment and inventory reduction, but LME inventory accumulation and domestic supply recovery will limit the upside space [3][8][9] Summary by Sections Transaction Data - From December 19th to 26th, the SHFE zinc price rose from 23,065 yuan/ton to 23,170 yuan/ton, an increase of 105 yuan/ton; the LME zinc price rose from 3078 dollars/ton to 3086.5 dollars/ton, an increase of 8.5 dollars/ton. The SHFE - LME ratio rose from 7.49 to 7.51. The SHFE inventory decreased by 3054 tons to 72963 tons, while the LME inventory increased by 6975 tons to 106,875 tons. The social inventory decreased by 0.75 million tons to 11.47 million tons, and the spot premium decreased by 10 yuan/ton to 80 yuan/ton [4] Market Review - Last week, the main contract of SHFE zinc fluctuated narrowly, closing at 23170 yuan/ton with a weekly increase of 0.41%. LME zinc also had a narrow - range fluctuation, closing at 3086.5 dollars/ton with a weekly increase of 0.28%. In the spot market, as the year - end approached, traders sold more goods, and the spot premium decreased. The downstream's purchasing weakened in the second half of the week [5] Macroeconomic Situation - The US GDP in Q3 was stronger than expected, and the initial jobless claims data last week was better than expected, leading the market to slightly increase the expectation of a Fed rate cut in January next year. The domestic central bank's Q4 meeting pointed out to continue implementing a moderately loose monetary policy and strengthen counter - cyclical and cross - cyclical adjustments [3][6][8] Fundamental Analysis - **Supply**: In January 2026, the domestic and foreign zinc concentrate processing fees continued to decline month - on - month, but the SHFE - LME ratio has recovered to open the zinc concentrate import window, and the weekly processing fees have stopped falling. The supply of refined zinc in January 2026 is expected to increase by about 15,000 tons month - on - month, and the supply pressure has a marginal increase [3][8] - **Demand**: The lifting of environmental protection restrictions in the north and project rush in the south supported the increase in the operating rate of galvanizing enterprises. The operating rates of die - casting zinc alloy and zinc oxide enterprises also increased. However, the new round of environmental protection control in the north is approaching, and the enterprises' operations are still under pressure [3][8] Industry News - In January 2026, the average domestic and foreign zinc concentrate processing fees were 1400 yuan/metal ton and 79.04 dollars/dry ton respectively, showing a month - on - month decrease. In November, the zinc concentrate import volume increased year - on - year and month - on - month, the refined zinc import volume decreased year - on - year and month - on - month, and the refined zinc export volume led to a net export of 24,600 tons. GMI will continue to provide loans to Shuka to acquire LEM Mining and Kabwe Zinc Mine [10]