1. Report Industry Investment Rating - Unilateral: Cautiously bearish [5] - Arbitrage: Neutral [5] 2. Core View of the Report - A trend of inventory accumulation may have formed. After the reaction of macro - bullish factors, the deviation from the fundamentals may pull the zinc price back, and attention should be paid to changes in social inventory [1][4] 3. Summary by Relevant Catalogs Important Data - **Spot**: The LME zinc spot premium was -$21.64 per ton. The SMM Shanghai zinc spot price dropped by 140 yuan per ton to 22,270 yuan per ton, with the premium unchanged at 90 yuan per ton. The SMM Guangdong zinc spot price fell by 150 yuan per ton to 22,200 yuan per ton, and the premium decreased by 10 yuan per ton to 20 yuan per ton. The SMM Tianjin zinc spot price declined by 140 yuan per ton to 22,200 yuan per ton, with the premium unchanged at 20 yuan per ton [2] - **Futures**: On July 7, 2025, the main SHFE zinc contract opened at 22,340 yuan per ton and closed at 22,090 yuan per ton, down 260 yuan per ton from the previous trading day. The trading volume was 160,506 lots, an increase of 6,935 lots, and the open interest was 126,532 lots, a decrease of 1,468 lots. The intraday price fluctuated between 22,040 - 22,360 yuan per ton [2] - **Inventory**: As of July 7, 2025, the total inventory of zinc ingots in seven regions monitored by SMM was 89,100 tons, an increase of 8,500 tons from the previous week. The LME zinc inventory was 110,600 tons, a decrease of 1,725 tons from the previous trading day [3] Market Analysis - **Spot Market**: The absolute price declined, increasing downstream point - pricing enthusiasm and improving market transactions, but the spot premium did not improve significantly. After the absolute price rose, spot market transactions became more sluggish, and the spot premium dropped rapidly [4] - **Supply**: In June, supply increased by 7.2% year - on - year. The expected output in July remains as high as 590,000 tons, with continuous supply pressure. The impact of the smelting strike in Peru overseas has been resolved [4] - **Inventory**: The increase in social inventory has widened, and a trend of inventory accumulation may have formed. The finished product inventory of smelters and zinc alloy inventory have increased significantly, the alloy operating rate has started to decline, and a negative feedback from invisible inventory may occur [4] - **Cost**: The TC at the mine end has further increased, expanding smelting profits and further boosting smelting enthusiasm, resulting in continuous supply pressure [4]