Group 1: Important Data - LME zinc spot premium is -$1.95 per ton. SMM Shanghai zinc spot price decreased by 80 yuan/ton to 22,570 yuan/ton, with a spot premium of -5 yuan/ton. SMM Guangdong zinc spot price decreased by 70 yuan/ton to 22,530 yuan/ton, with a spot premium of -80 yuan/ton. Tianjin zinc spot price decreased by 70 yuan/ton to 22,530 yuan/ton, with a spot premium of -45 yuan/ton [1] - On July 30, 2025, the SHFE zinc main contract opened at 22,645 yuan/ton and closed at 22,655 yuan/ton, down 80 yuan/ton from the previous trading day. The trading volume was 127,217 lots, and the open interest was 117,616 lots. The highest price was 22,725 yuan/ton, and the lowest was 22,580 yuan/ton [2] - As of July 30, 2025, the total inventory of zinc ingots in seven regions monitored by SMM was 103,700 tons, a change of 5,500 tons from the previous period. The LME zinc inventory was 112,150 tons, a change of -3,350 tons from the previous trading day [3] Group 2: Market Analysis - In the spot market, the spot premium is overall. The import ore TC is still rising. Vedanta's Q2 report shows a 7% year-on-year increase in zinc concentrate production. Domestic smelting profits remain high, and the expectation of oversupply in the second half of the year remains unchanged. Smelters' raw material inventory has increased to 29.7 days, with sufficient raw material reserves and low procurement enthusiasm for the ore end [4] - On the consumption side, the downstream operating rate shows relative resilience, and overall consumption is not bad, but it cannot offset the high growth on the supply side. Social inventory shows a trend of accumulation, and it is expected that this trend will continue in the second half of the year. At the same time, overseas inventory has been increasing continuously. A rapid increase in social inventory will suppress zinc prices [4] Group 3: Strategy - Unilateral: Cautiously bearish [5] - Arbitrage: Neutral [5]

Report Industry Investment Rating - Unilateral: Neutral [4] - Arbitrage: Neutral [4] Core View - The short - term direction of zinc price fluctuations is difficult to judge. Overseas geopolitical conflicts have changed, causing the zinc futures price to rise. The consumption side may face challenges in May, and there is a possibility of a month - on - month weakening in consumption after May. Attention should be paid to inventory changes [1][3]. Summary by Related Content Important Data - Spot market: In the Guangdong region, inventory has been continuously declining, and due to shortages of individual brands, the spot premium has slightly increased. In the East China region, the procurement enthusiasm has declined due to the replenishment of imported zinc ingots in the early stage. In the North China region, procurement is mainly for rigid demand, and the overall spot market premium and discount remain stable. In the overseas mining end, the output in the first quarter was lower than expected, but it does not change the expectation of zinc ingot surplus. Although the upside space of TC is limited, smelting still has profits at the current TC price, and the smelting enthusiasm remains, with supply pressure still existing. The inventory of imported mines in China is sufficient, and there are no conditions for a short - term TC reduction. The consumption side may face a test in May, and there is a possibility of a month - on - month weakening in consumption after May [1][3]. - Futures: On May 20, 2025, the main SHFE zinc contract opened at 22,415 yuan/ton and closed at 22,435 yuan/ton, a decrease of 30 yuan/ton from the previous trading day. The trading volume throughout the trading day was 94,706 lots, a decrease of 31,390 lots from the previous trading day. The position throughout the trading day was 76,630 lots, a decrease of 8,930 lots from the previous trading day. The intraday price fluctuated, with a maximum of 22,490 yuan/ton and a minimum of 22,360 yuan/ton [1]. - Inventory: As of May 19, 2025, the total inventory of SMM's seven - region zinc ingots was 83,800 tons, a decrease of 1,700 tons from the same period last week. As of May 20, 2025, the LME zinc inventory was 156,725 tons, a decrease of 4,075 tons from the previous trading day [2].

Core Viewpoint - Zinc prices experienced a slight decline last week, with domestic and international market indicators showing mixed signals regarding supply and demand dynamics [1] Market Performance - As of last Friday, the Shanghai zinc index rose by 0.05% to 22,048 CNY/ton, with total open interest at 230,200 contracts [1] - The London Metal Exchange (LME) zinc price increased by 23 to 2,622.5 USD/ton, with total open interest at 213,200 contracts [1] Inventory and Supply - Domestic zinc ingot inventory recorded 1,900 tons, while social inventory decreased slightly to 83,300 tons [1] - LME zinc ingot inventory stood at 170,700 tons, with 66,800 tons of canceled warrants [1] - Zinc concentrate port inventory reached 371,000 physical tons, and factory inventory was at 583,000 physical tons [1] Processing Fees and Costs - Domestic zinc concentrate processing fee is at 3,500 CNY/metal ton, while the import processing fee is at 40 USD/dry ton [1] Downstream Demand - The operating rate for galvanized structural components is at 60.87%, with raw material inventory at 15,000 tons and finished product inventory at 37,800 tons [1] - The operating rate for die-casting zinc alloys is at 54.60%, with raw material inventory at 13,000 tons and finished product inventory at 9,000 tons [1] - The operating rate for zinc oxide is at 59.73%, with raw material inventory at 3,000 tons and finished product inventory at 6,000 tons [1] Market Outlook - Overall, the continuous increase in zinc concentrate port inventory and rising processing fees indicate an ongoing surplus in zinc ore [1] - Although zinc ingot inventory has slightly increased, domestic warehouse receipts remain low, suggesting a relatively strong near-term market [1] - In the medium term, limited downstream purchasing and pressure from imported zinc ingots are expected to lead to an accumulation of social inventory, posing a downward risk to zinc prices [1]

Core Viewpoint - Zinc prices have continued to rise, with the Shanghai zinc index increasing by 0.62% to 22,676 yuan/ton, while the London zinc price rose by 18.5 to 2,684.5 USD/ton, indicating a bullish trend in the market [1] Price and Inventory Summary - The average price of SMM 0 zinc ingots is 23,180 yuan/ton, with various regional basis prices reported: Shanghai at 175 yuan/ton, Tianjin at 255 yuan/ton, and Guangdong at 430 yuan/ton [1] - The Shanghai Futures Exchange recorded zinc ingot inventory at 0.32 thousand tons, while domestic social inventory slightly decreased to 85.8 thousand tons [1] - LME zinc ingot inventory stands at 182.3 thousand tons, with 31.7 thousand tons in canceled warrants [1] Market Dynamics - The domestic zinc concentrate treatment charge (TC) is 3,450 yuan/metal ton, while the import TC is 40 USD/dry ton [1] - Zinc concentrate port inventory is at 287 thousand physical tons, and factory inventory is at 596 thousand physical tons [1] - The operating rate for galvanized structural components is 62.44%, with raw material inventory at 16 thousand tons and finished product inventory at 388 thousand tons [1] Future Outlook - Zinc mine inventory is increasing, and treatment charges are on the rise, maintaining expectations of oversupply in the zinc concentrate market [1] - Zinc ingot inventory is decreasing, with monthly differentials remaining high, indicating relative strength in the near term [1] - However, it is anticipated that downstream purchasing will gradually weaken after the peak seasons, coupled with pressure from imported zinc ingots, leading to potential accumulation of social inventory and downward risks for zinc prices [1]