1. Report Industry Investment Rating - Zinc: Volatile [5] 2. Core Viewpoints of the Report - In the short - term, zinc downstream exports still have resilience, but may face pressure in the medium - term. Most manufacturers are cautiously optimistic about the future market. It is necessary to monitor whether regions like Europe, Japan, South Korea, and Australia can fill the demand gap after the shrinkage of Middle - East orders due to geopolitical disturbances and the release of postponed demand from last year's policy. In the long - term, the cash - flow of companies exporting to the Middle East may face pressure in the second quarter, and anti - dumping measures will affect export orders in the medium - to - long term. Overall, the possibility of weak or pressured export demand is increasing. [3][35] - In terms of trading strategies, for single - side trading, manage positions well in the short - term and focus on buying opportunities during corrections in the medium - term. For arbitrage trading, adopt a wait - and - see approach for monthly spreads and maintain a long domestic - short overseas positive arbitrage strategy in the medium - term. [3][38] 3. Summary According to the Directory 3.1. Research Objects - The research was conducted on galvanizing and zinc oxide enterprises in Weifang and Zibo, Shandong. These enterprises are large - to - medium - sized, with annual galvanized product output of 20 - 290 million tons and annual zinc oxide production capacity of 3 - 10 million tons, comprehensively reflecting the current demand evolution pattern. [12] 3.2. Core Research Conclusions and Analysis - Galvanized and color - coated exports are mainly for civil construction, and overseas requirements for zinc coating thickness are becoming stricter. Overseas markets mainly use zinc products for civil construction, and many countries have set requirements for zinc coating thickness. In contrast, domestic zinc coating thickness is generally lower. Export galvanized products have maintained high - speed growth in the past five years, and the actual zinc consumption per unit may have increased. [17][18] - Orders for large, medium, and small factories are differentiated, and raw material inventories are generally low. Medium - and large - sized enterprises maintain full production with stable orders, while some export - oriented enterprises have over one - month order backlogs but with year - on - year differences. Some orders postponed from last year were released in Q1 2026. Manufacturers are cautious about Q2 demand, and raw material inventories are low, indicating potential upward pressure on zinc and black metal prices. [20] - The probability of export shocks is increasing, with dual pressures from geopolitical conflicts and anti - dumping. The US - Iran conflict has negatively affected exports to the Middle East, with difficulties in customer communication, delayed shipments, and inventory backlogs. Rising freight costs and anti - dumping measures have also impacted exports. However, export orders to Europe, the US, Japan, and South Korea have increased recently. [24][25] - The zinc oxide industry is facing intensified competition, and it is difficult to find a blue ocean overseas. The industry suffers from raw material shortages, thin profits, and is highly affected by zinc price fluctuations, forcing enterprises to expand overseas. But overseas markets are also competitive, with only Indonesia having some room. The domestic capacity expansion willingness is low, and if the raw material shortage persists, the industry will face reshuffling. [28][32] 3.3. Summary and Outlook - In the short - term, zinc downstream exports can maintain some resilience, but medium - term pressure signals are emerging. The cash - flow of companies exporting to the Middle East may face slight pressure in the next quarter, and anti - dumping measures will affect export orders in the medium - to - long term. It is necessary to monitor whether overseas markets can accept price increases due to policies. [35] - Fundamentally, short - term domestic processing fees are rising seasonally, while import processing fees are under pressure. The supply of zinc concentrate remains tight. On the demand side, domestic social inventories have accumulated seasonally, and downstream resumption of work is slow, while overseas inventories are gradually decreasing. [36] - In terms of trading, zinc may enter a volatile adjustment period in the short - term. In the medium - term, it is recommended to buy on dips as geopolitical situations may strengthen the resource attribute of zinc concentrate. [38] 3.4. Research Minutes 3.4.1. Galvanizing Enterprise A - Basic situation: Mainly produces galvanized products, almost all for export. It has 4 production lines and plans to launch a new aluminized zinc line this year. The export market is mainly in Africa, Southeast Asia, South America, and the Middle East, and products are used for civil construction. [43] - Research situation: Operating at full capacity, with order backlogs of over one - and - a - half months. The new aluminized zinc line is in response to overseas demand. Some export orders are delayed due to rising freight costs. The impact of the "buy - order export" policy has basically been eliminated. Near - term orders are expected to be good, but long - term uncertainty is high. Raw materials are mainly sourced from Chihong and Huxin, with a half - month inventory. Profits are thin, and there is little hedging. [44][45][49] 3.4.2. Galvanizing Enterprise B - Basic situation: Produces aluminized zinc and galvanized plates, with 80 - 90% of products for export. It has 3 production lines, with one planned for renovation in 2025. [52] - Research situation: Currently operating two production lines, with order backlogs of 40 - 50 days. Orders have declined compared to last year due to the "buy - order export" policy but are expected to recover. Cautious about Q2 demand. Zinc ingots are mainly sourced from Tianjin and Hebei, and the aluminized zinc profit is higher. Raw material inventory is about 50 - 60 tons, and finished product inventory is about 20,000 tons. [53][54] 3.4.3. Galvanizing and Color - Coating Enterprise C - Basic situation: Produces galvanized, aluminized zinc, zinc - aluminum - magnesium, color - coated, and cold - rolled products. It has large - scale production capacity, and the terminal consumption includes various fields. The export market includes multiple regions, and the recent Middle - East exports are affected. [56] - Research situation: Operating at full capacity, with products mainly for domestic sales. Orders are stable, and the company expects good demand this year. Raw materials are mainly self - produced, and the long - term order ratio is high. Profits are stable, with raw material inventory of 7 - 80,000 tons. Not participating in hedging but concerned about the futures market. [57][58][62] 3.4.4. Galvanizing Enterprise D - Basic situation: Produces galvanized and aluminized zinc products, all for export. It has a galvanizing and an aluminized zinc line, with the aluminized zinc order decreasing in recent years. [65] - Research situation: Order backlogs are 30 - 35 days, a decrease compared to last year. The "buy - order export" policy has little impact. Raw materials are mainly Chihong zinc, and profits are decreasing year by year. There is pressure on short - term cash - flow, and no inventory is maintained. Not participating in hedging. [66][67][68] 3.4.5. Zinc Oxide Enterprise E - Basic situation: A private enterprise with an annual zinc oxide production capacity of 100,000 tons. It has invested in a project in Cambodia and may build a plant in Egypt in the future. The domestic zinc oxide industry is highly competitive, and raw material prices are rising. [70] - Research situation: Operating at full capacity, with an order cycle of about one week. Zinc ingots and zinc slag each account for about 50% of raw materials. Profits are mainly affected by zinc ingots, and the finished product inventory is about 1,000 tons. Not participating in hedging, and the environmental protection is in line with the standards. [71][73] 3.4.6. Resource Comprehensive Recycling Enterprise F - Basic situation: A solid waste and hazardous waste recycling enterprise, mainly for the rubber and tire industries. It has waste treatment capacity and produces zinc alloy and other products. The regeneration - to - primary zinc ratio is about 7:3, and the export demand for zinc powder in zinc - manganese batteries may increase. [74][75] - Research situation: Order backlogs are about one month, and orders are stable. Raw materials are mainly secondary zinc oxide, and the long - term order ratio is about 80%. Profits are thin, with raw material inventory of about 50 - 60 tons and finished product inventory of about 20,000 tons. Not participating in hedging, and the environmental protection pressure is controllable. [76][77][79] 3.4.7. Zinc Oxide Enterprise G - Basic situation: With an annual zinc oxide production capacity of 60,000 tons, the downstream is mainly tire enterprises. It believes that the industry is highly competitive and plans to expand in Indonesia. [81] - Research situation: Operating at full capacity. The long - term tire demand is weak, and domestic production cuts may become a trend. Raw materials are purchased flexibly, and there are no long - term orders. Profits are continuously compressed, with a hedging ratio of about 50 - 60%. The environmental protection pressure is relatively small. [82][83][86] 3.4.8. Zinc Oxide Enterprise H - Basic situation: Mainly produces nano - zinc oxide, mainly for rubber tires and feed additives. It has the capacity to produce high - end products but has low order - taking willingness. The parent company has sulfuric acid production capacity. It has no plan to expand overseas. [87] - Research situation: Operating at full capacity, with order backlogs of 1 - 2 months. Profits are under pressure, and it is cautious about the short - term market but optimistic about the long - term rubber - grade zinc oxide demand. Raw materials are mainly from Hebei, and there is no hedging. The environmental protection meets the standards. [88][89][90]