Core View - Bullish factors: Supply shortage due to reduced production in northern mines supports zinc prices, and increased downstream demand is driven by smelters' active procurement of domestic ore and lower processing fees [3] - Bearish factors: Hawkish remarks from the Federal Reserve suppress rate - cut expectations, leading to a collective correction in metals, and an increase of about 2000 tons in LME zinc inventory last week restricts the upside potential of prices [3] - Trading advice: Short - term focus on the support of tight mine supply for zinc prices, no future strategy provided [3] Processing and Terminal Demand - Data presented on galvanized coil market sentiment index, inventory, production, net exports, die - cast zinc alloy net imports, color - coated sheet net exports, zinc oxide net exports, real estate development investment and progress, sales and unsold area, land transaction area, and commercial housing transaction volume [4][7][10][12][14] Supply and Supply - side Profits - Data on zinc concentrate monthly import volume, TC, zinc ingot monthly production, production profit and processing fees, raw material inventory days, and various zinc inventories including LME, SHFE, and exchange inventories are provided [18][20][21][23][24] Futures and Spot Market Review - Information on the trends of domestic and foreign zinc prices, trading volume and open interest of Shanghai zinc futures, LME zinc closing price vs. US dollar index, LME zinc premium, and zinc ingot basis in different regions is presented [26][27][28][30][35]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - For lead, the lead price is under pressure above. The supply shortage has improved due to better refinery operations, and the support from the raw material side may weaken. It is recommended to hold previous short positions [1]. - For zinc, the short - term zinc price may be under pressure due to weak fundamentals. In the medium - term, the tightening of the ore end in the fourth quarter will support the zinc price to some extent. It is recommended to hold previous short positions and conduct range operations, while being vigilant about the recurrence of overseas risks [1]. 3. Summary by Relevant Catalogs Lead - **Price and Market Data**: On November 21, 2025, the average price of SMM1 lead ingots increased by 0.15% to 17,125 yuan/ton, and the closing price of the Shanghai lead futures main contract decreased by 0.17% to 17,220 yuan/ton. The trading volume of the active futures contract decreased by 19.43% to 37,231 lots, and the open interest decreased by 5.65% to 60,285 lots. The LME inventory remained unchanged at 264,650 tons, and the Shanghai lead warehouse receipt inventory decreased by 2.08% to 30,556 tons. The Shanghai - London lead price ratio decreased by 0.17% to 8.55 [1]. - **Industry News**: In October 2025, China's lead - acid battery imports were 469,800 units, a month - on - month increase of 7.55 percentage points and a year - on - year decrease of 9.5 percentage points; from January to October 2025, the cumulative imports were 4.4253 million units, a year - on - year decrease of 8.27 percentage points. In October 2025, the export volume was 16.615 million units, a month - on - month decrease of 2.75 percentage points and a year - on - year decrease of 14.23 percentage points; from January to October 2025, the cumulative export volume was 186 million units, a year - on - year decrease of 9.29 percentage points. On November 19, [LME0 - 3 lead] was at a discount of $27.39/ton, and the open interest decreased by 8,802 lots to 161,114 lots [1]. - **Fundamentals**: There is no expected increase in lead concentrate imports, and processing fees are likely to rise. Some refineries have maintenance plans, with the operation of primary lead fluctuating slightly. In secondary lead, the operation in Anhui increased after restart, while that in Henan decreased due to environmental protection. The demand side improved, and the operation of lead - battery enterprises was okay [1]. Zinc - **Price and Market Data**: On November 21, 2025, the average price of SMM1 zinc ingots increased by 0.04% to 22,360 yuan/ton, and the closing price of the Shanghai zinc futures main contract decreased by 0.18% to 22,380 yuan/ton. The trading volume of the active futures contract decreased by 40.03% to 54,719 lots, and the open interest decreased by 8.43% to 61,797 lots. The LME inventory remained unchanged at 46,075 tons, and the Shanghai zinc warehouse receipt inventory decreased by 2.19% to 73,668 tons. The Shanghai - London zinc price ratio decreased by 0.18% to 7.48 [1]. - **Industry News**: As of November 20, the total inventory of SMM seven - region zinc ingots was 152,700 tons, a decrease of 5,200 tons compared to November 13 and a decrease of 3,900 tons compared to November 17. On November 19, [LME0 - 3 zinc] was at a premium of $152.14/ton, and the open interest decreased by 2,315 lots to 218,416 lots [1]. - **Fundamentals**: Refineries are actively purchasing domestic zinc ores, and the domestic ore shortage persists with processing fees expected to decline. The production of zinc ingots is not affected, and the demand is weak as outdoor construction in the north stops due to cold weather [1].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Since 2025, the zinc concentrate processing fee has been rising due to the increase in zinc concentrate supply at home and abroad. The domestic zinc concentrate processing fee has declined after rising, showing a divergence from the import fee. In the fourth quarter, the domestic zinc concentrate processing fee may continue to fall, while the import fee may be raised. The refined zinc output is expected to remain high, and the zinc price is expected to fluctuate weakly [1]. Summary According to Relevant Catalogs I. Zinc Concentrate Processing Fee and Zinc Price (1) Zinc Concentrate Processing Fee - The zinc concentrate processing fee (TC/RC) is the fee paid by mineral producers or traders to smelters for processing zinc concentrate into refined zinc. Overseas and domestic markets have different ways of determining the processing fee. The rise and fall of the processing fee are affected by factors such as zinc ore production supply, smelting demand, the ratio of Shanghai and London zinc prices, and the profits of mines and smelters [5][6]. (2) The Relationship between Zinc Concentrate Processing Fee and Zinc Price - In the long - term, there is a significant negative relationship between the zinc concentrate processing fee and the zinc price. The change in the processing fee can have an important impact on the zinc price trend [7][10]. II. Analysis of the Trend of Zinc Concentrate Processing Fee (1) Significant Increase in Zinc Concentrate Processing Fee - In 2025, both domestic and imported zinc concentrate processing fees have increased significantly. The reasons are the supply of zinc concentrate turning from tight to relatively loose due to the resumption of production and new capacity release of mines at home and abroad, and the sufficient raw material inventory and strong price - holding sentiment of domestic smelters [11][13][16]. (2) Divergence between Domestic and Imported Zinc Ore Processing Fees - Since the second half of the year, the domestic and imported zinc concentrate processing fees have shown a significant divergence. The import fee has continued to rise, while the domestic fee has fallen after reaching a high. The reasons are the import loss of zinc concentrate, the preference for domestic zinc ore by smelters, and the expected decrease in domestic zinc ore production in the fourth quarter [18][21]. (3) Outlook on the Trend of Zinc Concentrate Processing Fee in the Fourth Quarter - In the fourth quarter, the supply of zinc concentrate is expected to remain loose, but the domestic zinc concentrate processing fee may continue to fall due to the reduction of supply from northern mines and the winter storage demand of smelters. The import processing fee may be under pressure to adjust [22]. III. Outlook on the Zinc Price Trend in the Fourth Quarter - Currently, the domestic and overseas zinc markets are divided. Domestic refined zinc output is high, and the inventory is increasing, resulting in a weak domestic zinc price. In the fourth quarter, the refined zinc output is expected to remain high, the demand is weak, and the zinc price is expected to fluctuate weakly [23][24][26].

Group 1: Investment Rating - The investment rating for both single - side trading and arbitrage is neutral [6] Group 2: Core View - Macro factors and continuous decline in overseas inventories support the rise of zinc prices, but the consumer side struggles to keep up, with cold spot transactions and difficult - to - repair spot discounts. The domestic fundamentals are still weak, with high supply pressure. However, overseas factors provide favorable support, and there is a risk of a short squeeze. The short - term zinc price is judged to be neutral [5] Group 3: Summary by Directory 1. Important Data - **Spot**: The LME zinc spot premium is $14.98 per ton. The SMM Shanghai zinc spot price increased by 50 yuan/ton to 22,150 yuan/ton, with a spot premium of - 70 yuan/ton. The SMM Guangdong zinc spot price increased by 40 yuan/ton to 22,140 yuan/ton, with a premium of - 80 yuan/ton. The Tianjin zinc spot price increased by 50 yuan/ton to 22,140 yuan/ton, with a premium of - 80 yuan/ton [2] - **Futures**: On September 2, 2025, the main SHFE zinc contract opened at 22,175 yuan/ton and closed at 22,325 yuan/ton, up 130 yuan/ton from the previous trading day. The trading volume was 125,688 lots, and the open interest was 107,662 lots. The highest price during the day was 22,380 yuan/ton, and the lowest was 22,165 yuan/ton [3] - **Inventory**: As of September 2, 2025, the total inventory of zinc ingots in seven major regions monitored by SMM was 146,300 tons, a change of 1,800 tons from the previous period. The LME zinc inventory was 55,600 tons, a change of - 275 tons from the previous trading day [4] 2. Market Analysis - Macro factors and continuous decline in overseas inventories support zinc price increases, but the consumer side is weak. The domestic fundamentals are weak, with high supply pressure as the zinc ingot production in August increased by 28% year - on - year. There is a high probability of inventory accumulation during the consumption peak season. Overseas factors provide favorable support, with a good macro - environment, supply contraction, stable consumption, declining inventories, narrowing discounts, and a risk of a short squeeze. After the decline in the absolute price of zinc ingots, the downstream purchasing enthusiasm has improved [5] 3. Strategy - Both single - side trading and arbitrage strategies are rated as neutral [6]

Report Summary 1. Report Industry Investment Rating No investment rating is provided in the report. 2. Core View The report suggests that due to the continuous increase in zinc ore processing fees and a significant rise in sulfuric acid prices, smelters' profits have been further repaired, leading to increased production enthusiasm. With the release of new production capacity and the resumption of previously overhauled capacity, the supply growth has accelerated. Currently, the import loss continues to widen, resulting in a decline in the inflow of imported zinc. On the demand side, the downstream has entered the off - season, with a year - on - year decrease in the operating rate of processing enterprises. Recently, zinc prices have been adjusted widely, and downstream enterprises purchase on demand at low prices and have a low acceptance of high - priced zinc. Domestic social inventories have increased, and the spot premium has dropped to a low level. Overseas, LME inventories are stable, and the spot premium has been adjusted downward. Technically, the position has decreased, and the price has corrected, with cautious trading between bulls and bears. It is recommended to wait and see or take a short position with a light position [3]. 3. Summary by Directory 3.1 Futures Market - The closing price of the Shanghai Zinc main contract is 22,345 yuan/ton, down 325 yuan; the 08 - 09 contract spread is - 35 yuan/ton, up 10 yuan - The LME three - month zinc quote is 2,795.5 dollars/ton, down 19 dollars - The total position of Shanghai Zinc is 214,027 lots, down 9,725 lots; the net position of the top 20 in Shanghai Zinc is 11,306 lots, down 419 lots - Shanghai Zinc warehouse receipts are 15,232 tons, down 75 tons; SHFE inventory is 59,419 tons, up 4,789 tons; LME inventory is 109,050 tons, down 3,100 tons [3] 3.2现货市场 - The spot price of 0 zinc on the Shanghai Non - ferrous Metals Network is 22,300 yuan/ton, down 380 yuan; the spot price of 1 zinc in the Yangtze River Non - ferrous Metals Market is 21,820 yuan/ton, down 950 yuan - The basis of the ZN main contract is - 45 yuan/ton, down 55 yuan; the LME zinc premium (0 - 3) is - 2.69 dollars/ton, up 1.23 dollars - The factory price of 50% zinc concentrate in Kunming is 17,330 yuan/ton, up 60 yuan; the price of 85% - 86% crushed zinc in Shanghai is 15,900 yuan/ton, down 200 yuan [3] 3.3 Upstream Situation - WBMS: The zinc supply - demand balance is - 124,700 tons, down 104,100 tons; ILZSG: The zinc supply - demand balance is - 69,100 tons, up 10,400 tons - ILZSG: The global zinc ore production is 1.0075 million tons, down 4,300 tons; domestic refined zinc production is 628,000 tons, up 45,000 tons - Zinc ore imports are 455,900 tons, up 124,900 tons [3] 3.4 Industry Situation - Refined zinc imports are 35,156.02 tons, down 22,615.39 tons; refined zinc exports are 483.88 tons, up 266.83 tons - Zinc social inventory is 83,500 tons, up 2,600 tons [3] 3.5 Downstream Situation - The production of galvanized sheets is 2.32 million tons, down 130,000 tons; the sales of galvanized sheets are 2.34 million tons, down 120,000 tons - The newly started housing area is 303.6432 million square meters, up 71.8071 million square meters; the completed housing area is 225.6661 million square meters, up 41.8147 million square meters - Automobile production is 2.8086 million vehicles, up 166,600 vehicles; air - conditioner production is 19.6788 million units, up 3.4764 million units [3] 3.6 Option Market - The implied volatility of the at - the - money call option for zinc is 14.97%, down 0.19%; the implied volatility of the at - the - money put option for zinc is 15%, down 0.15% - The 20 - day historical volatility of the at - the - money option for zinc is 10%, unchanged; the 60 - day historical volatility of the at - the - money option for zinc is 13.79%, down 0.07% [3] 3.7 Industry News - The Political Bureau of the CPC Central Committee decided to hold the Fourth Plenary Session of the 20th Central Committee in October, analyzed the current economic situation, and deployed economic work for the second half of the year - The Fed has kept interest rates unchanged for five consecutive meetings, but two voting members support rate cuts, pointing out that economic growth has slowed down - The US private sector added 104,000 jobs in July, exceeding economists' expectations but still far below last year's average [3]