Report Industry Investment Rating - Unilateral: Cautiously bullish. Arbitrage: Neutral [5] Core View - Zinc prices have fallen, and there is restocking behavior in the spot market, but social inventories are increasing and are about to exceed the same period in the past five years. Spot liquidity has improved, but procurement remains cautious. On the cost side, the TC of domestic and imported ores continues to rise, smelting profits are increasing, and smelting enthusiasm persists. The supply-side increase expectation remains unchanged. With the further improvement of smelter raw material reserves, the available days of ore have not declined despite the continuous increase in smelting output. It is expected that the TC will continue to rise. The pressure on the supply side continues to be prominent. Even with a strong performance during the consumption peak season, the domestic inventory accumulation expectation remains unchanged, and the current inventory accumulation is accelerating. If the expectation of the consumption peak season fails, zinc prices will face significant pressure. Even when other non-ferrous metals are strengthening, zinc prices are expected to show a relatively weak trend, but the impact of overseas inventories needs to be watched [4] Key Data Summary Spot Market - LME zinc spot premium is $1.70 per ton. The SMM Shanghai zinc spot price increased by 210 yuan/ton to 23,420 yuan/ton, with a spot premium of -55 yuan/ton. The SMM Guangdong zinc spot price increased by 230 yuan/ton to 23,490 yuan/ton, with a spot premium of -35 yuan/ton. The Tianjin zinc spot price increased by 210 yuan/ton to 23,390 yuan/ton, with a spot premium of -85 yuan/ton [1] Futures Market - On March 30, 2026, the main SHFE zinc contract opened at 23,250 yuan/ton and closed at 23,540 yuan/ton, up 285 yuan/ton from the previous trading day. The trading volume for the day was 104,645 lots, and the position was 97,355 lots. The highest intraday price reached 23,575 yuan/ton, and the lowest was 23,190 yuan/ton [2] Inventory - As of March 30, 2026, the total inventory of zinc ingots in SMM's seven major regions was 248,200 tons, a decrease of 1,400 tons from the previous period. As of the same date, the LME zinc inventory was 115,275 tons, a decrease of 100 tons from the previous trading day [3]

Report Summary 1. Investment Rating - Unilateral: Cautiously bullish [5] - Arbitrage: Neutral [5] 2. Core View - The spot market has entered a calm period. The domestic consumption is still in the recovery stage, and the social inventory has entered a downward channel. The zinc ore provides favorable support for zinc prices, and there is a possibility of overseas production cuts. The zinc price has priced in risks relatively fully, and if the Middle East crisis stabilizes later, the upward elasticity of zinc prices is still expected. In the long term, both the supply of ore and downstream consumption remain optimistic [4] 3. Summary by Directory Spot Market - LME zinc spot premium is -$24.76/ton. SMM Shanghai zinc spot price increased by 60 yuan/ton to 22,920 yuan/ton, with a spot premium of -65 yuan/ton; SMM Guangdong zinc spot price increased by 50 yuan/ton to 22,980 yuan/ton, with a spot premium of -30 yuan/ton; Tianjin zinc spot price increased by 60 yuan/ton to 22,900 yuan/ton, with a spot premium of -85 yuan/ton [1] Futures Market - On March 25, 2026, the main SHFE zinc contract opened at 22,875 yuan/ton and closed at 22,935 yuan/ton, down 65 yuan/ton from the previous trading day. The trading volume was 96,768 lots, and the open interest was 101,745 lots. The highest price during the day reached 23,115 yuan/ton, and the lowest price reached 22,830 yuan/ton [2] Inventory Situation - As of March 25, 2026, the total inventory of zinc ingots in seven regions monitored by SMM was 255,200 tons, a decrease of 10,900 tons from the previous period. As of the same date, the LME zinc inventory was 116,475 tons, a decrease of 625 tons from the previous trading day [3]

Group 1: Investment Rating - Unspecified [No relevant doc] Group 2: Core View - Zinc prices have strong support at the lower end. In the short term, there are still interferences on the zinc ore supply side, and the probability of overseas smelting restart is small. Although the domestic smelting losses are continuously narrowing and the supply enthusiasm remains, the current social inventory is high. However, it is expected that the inventory inflection point is approaching. In the long term, if the recession does not occur, the consumption at home and abroad still has good expectations, and zinc prices are still expected to perform well. The overseas inventory continues to decline, and the LME premium is expected to rise [1][5] Group 3: Summary of Key Data Spot - The LME zinc spot premium is -$1.50 per ton. The SMM Shanghai zinc spot price decreased by 50 yuan/ton to 22,510 yuan/ton, with a spot premium of -50 yuan/ton; the SMM Guangdong zinc spot price decreased by 50 yuan/ton to 22,490 yuan/ton, with a spot premium of -70 yuan/ton; the Tianjin zinc spot price decreased by 50 yuan/ton to 22,500 yuan/ton, with a spot premium of -60 yuan/ton [2] Futures - On August 14, 2025, the main SHFE zinc contract opened at 22,600 yuan/ton and closed at 22,480 yuan/ton, down 190 yuan/ton from the previous trading day. The trading volume for the whole trading day was 78,030 lots, and the position was 80,798 lots. The highest intraday price reached 22,640 yuan/ton, and the lowest reached 22,430 yuan/ton [3] Inventory - As of August 14, 2025, the total inventory of zinc ingots in seven places monitored by SMM was 129,200 tons, a change of 10,000 tons from the previous period. As of August 14, 2025, the LME zinc inventory was 77,450 tons, a change of -1,025 tons from the previous trading day [4] Group 4: Market Analysis - There are still interferences on the short - term supply side of zinc ore, such as the increase in shipping costs and concerns about Iranian zinc ore supply. The spot quotation TC of imported zinc ore is about $10 per ton. In the long - term contract, Korea Zinc signed a TC of $85 per ton with Teck Resources but increased the precious metal pricing. Due to the increase in overseas energy costs, the probability of overseas smelting restart is small. The domestic smelting losses are continuously narrowing, and the supply enthusiasm remains. The downstream consumption has entered the post - holiday resumption stage. Although the current social inventory is high, the inventory inflection point is expected to arrive. In the short term, it is necessary to be vigilant about the market's trading of recession expectations, but in the long term, if the recession does not occur, the consumption at home and abroad still has good expectations, and zinc prices are still expected to perform well. The overseas inventory continues to decline, and the LME premium is expected to rise [5] Group 5: Strategy - Unilateral: Cautiously bullish - Arbitrage: Neutral [6]

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints - In February, zinc prices fell sharply and then stabilized in a sideways movement. During the period from February 2nd to March 4th, the Shanghai Zinc weighted index dropped 4.89% to 24,510 yuan/ton, and the total position of Shanghai Zinc decreased significantly by 28,400 lots to 187,000 lots. The LME Zinc 3M contract dropped 2.57% to $3,283.5/ton, and its position decreased by 13,200 to 222,500 lots. The domestic zinc industry remains weak, with the domestic TC of zinc concentrate rising slightly and the smelting profit warming up slightly. The finished product inventory of smelting enterprises and the social inventory of zinc ingots have both increased significantly. The actual impact of the Iran conflict on zinc ore supply is small, but the market is still worried about trade disruptions and energy price increases. The sharp rise in oil prices has triggered inflation concerns, and the downward adjustment of interest rate cut expectations has put pressure on the trend of non-ferrous metals. Zinc prices are at risk of breaking downward. It is expected that zinc prices will mainly show wide - range fluctuations following the sector sentiment during the conflict [11]. 3. Summaries by Directory 3.1 Monthly Assessment - Zinc price performance: From February 2nd to March 4th, the Shanghai Zinc weighted index fell 4.89% to 24,510 yuan/ton, and the total position decreased by 28,400 lots to 187,000 lots. The LME Zinc 3M contract fell 2.57% to $3,283.5/ton, and its position decreased by 13,200 to 222,500 lots. The average price of SMM 0 zinc ingots was 24,470 yuan/ton, with Shanghai basis at -95 yuan/ton, Tianjin basis at -105 yuan/ton, and Guangdong basis at -115 yuan/ton, and the Shanghai - Guangdong price difference was 20 yuan/ton [11]. - Inventory and structure: The zinc ingot futures inventory on the Shanghai Futures Exchange was 74,700 tons. As of March 5th, the social inventory of zinc ingots in major domestic markets was 213,600 tons, an increase of 1,700 tons from March 2nd. The LME zinc ingot inventory was 95,400 tons, and the LME zinc ingot cancelled warrants were 6,800 tons. The cross - market structure showed that the ex - exchange Shanghai - London price ratio was 1.082, and the import profit and loss of zinc ingots was -2,560.87 yuan/ton [11]. - Industry data: The domestic TC of zinc concentrate was 1,550 yuan/metal ton, and the import TC index was $24/dry ton. The port inventory of zinc concentrate was 332,000 physical tons, and the factory inventory was 578,000 physical tons. The weekly operating rates of galvanized structural parts, die - cast zinc alloys, and zinc oxide were 6.84%, 8.73%, and 19.76% respectively [11]. 3.2 Macro Analysis - The report presents multiple charts related to the US fiscal and debt situation, the Fed's balance sheet, dollar liquidity, manufacturing PMIs of China and the US, and new and unfinished orders in the US manufacturing and non - ferrous metal manufacturing industries, but no specific textual analysis is provided [14][16][19][20]. 3.3 Supply Analysis - Zinc ore production: In February 2026, the zinc ore production was 224,300 metal tons, a year - on - year change of -6.9% and a month - on - month change of -23.8%. From January to February, the total zinc ore production was 518,600 metal tons, a cumulative year - on - year change of 3.0% [25]. - Zinc ore import: In December 2025, the net import of zinc ore was 462,600 dry tons, a year - on - year change of 1.15% and a month - on - month change of -10.44%. From January to December, the cumulative net import of zinc ore was 5.3188 billion dry tons, a cumulative year - on - year change of 30.4% [25]. - Zinc ore supply and inventory: In December 2025, the total domestic zinc ore supply was 496,000 metal tons, a year - on - year change of 3.82% and a month - on - month change of -8.8%. From January to December, the cumulative domestic zinc ore supply was 6.0632 billion metal tons, a cumulative year - on - year change of 9.5%. The port inventory of zinc concentrate was 315,000 physical tons, and the factory inventory was 618,000 physical tons [27]. - Zinc ingot production and import: In February 2026, the zinc ingot production was 504,600 tons, a year - on - year change of 4.9% and a month - on - month change of -10.0%. From January to February, the total zinc ingot production was 1.0652 million tons, a cumulative year - on - year change of 6.2%. In December 2025, the net import of zinc ingots was -16,000 tons, a year - on - year change of -148.9% and a month - on - month change of -31.5%. From January to December, the cumulative net import of zinc ingots was 242,000 tons, a cumulative year - on - year change of -48.9% [33]. 3.4 Demand Analysis - Operating rates and inventories of initial processing industries: The weekly operating rate of galvanized structural parts was 6.84%, with a raw material inventory of 13,000 tons and a finished product inventory of 383,000 tons. The weekly operating rate of die - cast zinc alloys was 8.73%, with a raw material inventory of 9,000 tons and a finished product inventory of 13,000 tons. The weekly operating rate of zinc oxide was 19.76%, with a raw material inventory of 2,000 tons and a finished product inventory of 9,000 tons [39]. - Apparent demand: In December 2025, the domestic apparent demand for zinc ingots was 553,000 tons, a year - on - year change of -8.7% and a month - on - month change of -8.5%. From January to December, the cumulative domestic apparent demand for zinc ingots was 6.96 million tons, a cumulative year - on - year change of 4.4% [41]. 3.5 Supply - Demand Inventory - Domestic zinc ingot balance: In December 2025, the domestic zinc ingot supply - demand gap was a shortage of 16,000 tons. From January to December, the cumulative domestic zinc ingot supply - demand gap was a surplus of 116,000 tons [52]. - Overseas zinc ingot balance: In November 2025, the overseas refined zinc supply - demand gap was a surplus of 32,000 tons. From January to November, the cumulative overseas refined zinc supply - demand gap was a surplus of 92,000 tons [55]. 3.6 Price Outlook - Domestic structure: As of March 5th, the social inventory of zinc ingots in major domestic markets was 213,600 tons, an increase of 1,700 tons from March 2nd. The zinc ingot futures inventory on the Shanghai Futures Exchange was 75,800 tons, the Shanghai basis was -105 yuan/ton, and the spread between the continuous contract and the first - month contract was -75 yuan/ton [60]. - Overseas structure: The LME zinc ingot inventory was 95,300 tons, and the LME zinc ingot cancelled warrants were 8,000 tons. The cash - 3S contract basis was -$16.64/ton, and the 3 - 15 spread was $61.56/ton [62]. - Cross - market structure: The ex - exchange Shanghai - London price ratio was 1.079, and the import profit and loss of zinc ingots was -2,681.29 yuan/ton [65]. - Position: The net long position of investment funds in LME zinc decreased slightly, and the net short position of commercial enterprises decreased [68].

Report Summary 1. Investment Rating - Unilateral: Cautiously bullish. - Arbitrage: Neutral [6] 2. Core View - The Middle East crisis continues to ferment, with limited short - term impact on zinc supply but long - term concerns about rising freight and transportation disruptions. There is also a need to be vigilant about the spill - over risk of mineral resource protection. - By - product prices are high, narrowing the comprehensive smelting losses. The domestic supply - demand situation depends on demand recovery, while overseas smelting profits are hard to realize due to high electricity prices, resulting in low supply pressure. - The low TC at the mine end supports zinc prices. - The spot market trading after the Chinese New Year needs time to recover, and attention should be paid to the later destocking rhythm. - There is an optimistic long - term expectation for the macro and actual consumption, and opportunities for buying and hedging at low prices should be sought [5] 3. Key Data Spot - LME zinc spot premium is - 19.21 dollars/ton. - SMM Shanghai zinc spot price is 24470 yuan/ton, a change of 70 yuan/ton from the previous trading day, with a spot premium of - 95 yuan/ton. - SMM Guangdong zinc spot price is 24450 yuan/ton, a change of 90 yuan/ton from the previous trading day, with a spot premium of - 115 yuan/ton. - Tianjin zinc spot price is 24460 yuan/ton, a change of 70 yuan/ton from the previous trading day, with a spot premium of - 105 yuan/ton [2] Futures - On March 4, 2026, the main SHFE zinc contract opened at 24375 yuan/ton, closed at 24480 yuan/ton, down 145 yuan/ton from the previous trading day. The trading volume was 160241 lots, and the open interest was 87434 lots. The highest price during the day was 24630 yuan/ton, and the lowest was 24360 yuan/ton [3] Inventory - As of March 4, 2026, the total inventory of zinc ingots in seven regions monitored by SMM was 25.46 million tons, a change of 3.47 million tons from the previous period. - As of March 4, 2026, the LME zinc inventory was 95250 tons, a change of - 125 tons from the previous trading day [4]

Group 1 - The market is experiencing a cautious sentiment ahead of the US-Iran nuclear talks, leading to a decline in oil prices and a drop in zinc prices, with LME zinc falling by 0.61% to close at $3367 per ton [1] - Domestic zinc processing fees remain low, indicating tight zinc ore supply, while zinc ingot supply pressure is not significant, suggesting support for zinc prices [2] - Recent data shows that domestic zinc ingot inventories have increased to 87,025 tons, a 33.57% rise compared to January 30, which is exerting pressure on zinc prices [2] Group 2 - The Chicago Federal Reserve President expressed optimism about potential interest rate cuts later this year, emphasizing the need for caution to prevent overheating of the economy and inflation [1] - The ongoing indirect negotiations between the US and Iran are being closely monitored by global financial markets, with positive signals from the mediation party indicating significant progress [1] - The short-term outlook for zinc prices is expected to fluctuate within a high range of 24,200 to 24,650 yuan per ton, as supply increases and demand remains weak [2]

Group 1 - The core viewpoint of the articles highlights the impact of strong U.S. employment data and declining London zinc inventories on zinc prices, with London zinc rising by 0.59% to close at $3,418 per ton [1][2] - The U.S. Labor Department reported an addition of 130,000 jobs in January, significantly exceeding market expectations of 70,000, and the unemployment rate decreased from 4.4% to 4.3%, indicating a robust labor market [1] - Domestic market conditions are weak as the Chinese New Year approaches, with both trader quotes and downstream purchasing intentions declining, leading to subdued spot transactions and stable premiums [2] Group 2 - The Shanghai zinc market is expected to experience limited changes, with social inventories continuing to accumulate and downstream factories beginning to enter holiday mode, resulting in weakened trading momentum [2] - Analysts suggest that with the upcoming Chinese New Year, market participation is likely to decrease, and it may be prudent for downstream buyers to consider stocking up at lower prices [2] - Short-term fluctuations in zinc prices are anticipated, with support levels projected between 23,500 and 24,500 yuan per ton, as market sentiment remains cautious [2]

1. Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. 2. Core Views of the Report - The sharp decline in zinc prices this week was due to the cross - variety liquidity shock caused by the weakening of precious metals and the fundamental risks previously highlighted. The demand support in the zinc market in the first quarter is not strong, and there is an overvaluation risk when zinc prices are above 25,000 yuan/ton [3]. - From the perspective of fundamentals and market sentiment, zinc prices may continue to decline weakly before the Spring Festival, but the current price drop may help build momentum for the peak season market after the festival [3]. - In terms of fundamentals, short - term zinc supply continues to be marginally loose. The arrival volume of domestic zinc ore in January was high, and port inventories reached a three - month high. Some domestic smelters have sufficient raw material inventories, and the planned zinc ingot production in February is expected to decrease by 52,000 - 57,000 tons month - on - month [3]. - On the downstream side, the decline in prices has marginally improved the willingness to purchase, but the procurement intensity of leading enterprises has not met market expectations. Downstream enterprises have entered the seasonal shutdown cycle for the Spring Festival, and the weighted operating rate has returned to the historical seasonal level. It is predicted that the peak inventory accumulation during the Spring Festival will be about 210,000 tons, and the inventory will start to decline rapidly in late March [3]. - In terms of price, the current profit margin of smelters provides cost support at around 23,000 yuan/ton [3]. - In terms of the internal - external price ratio, it is expected that the structure of weak domestic and strong external markets will continue in the first quarter. The uncertainty of European natural gas prices has postponed the expectation of overseas smelter复产, and some mines have lowered their production plans in Q4 2025, which provides continuous support for the external market. There is also a possibility that the zinc ingot export window may open again [3]. 3. Summary by Directory 3.1 Weekly Views - The decline in zinc prices was due to precious metal weakness and fundamental risks. Before the Spring Festival, zinc prices may continue to decline, but it may benefit the post - festival market. The short - term supply is loose, and downstream demand is affected by the Spring Festival shutdown. The expected peak inventory during the Spring Festival is about 210,000 tons, and the inventory will start to decline in late March. The cost support is around 23,000 yuan/ton, and the internal - external price ratio may maintain a weak domestic and strong external structure [3]. 3.2 Historical Spring Festival Data - The relationship between inventory reduction time and zinc price trends is not significant, and it mainly depends on long - term supply - demand logic. Zinc prices mostly decline during the Spring Festival. Historically, the first quarter is often at a relatively high price level, and the sharp decline in pre - festival zinc prices this year may improve downstream purchasing willingness and increase the probability of rapid post - festival inventory reduction [4]. 3.3 Monthly Balance Sheet - It is estimated that the zinc ingot production in January 2026 will be about 532,000 tons, and there will be a small - scale maintenance in February, with a planned month - on - month decrease of 52,000 tons. In terms of imports and exports, the zinc ingot export volume increased significantly in November and December 2025. In 2026, a low import volume is expected. It is predicted that the peak inventory of domestic zinc ingot social inventory during the Spring Festival will reach 210,000 tons, and the inventory will start to decline rapidly from March to April [5]. 3.4 Main Industry News - Antamina's 2026 production guidance was further reduced by 70,000 metal tons. MMG's zinc ore production in Q4 2025 increased by 2% year - on - year. Glencore's 2025 zinc production increased by 7% year - on - year, and its 2026 production guidance is 700,000 - 740,000 tons. Xinjiang Huoshaoyun Lead - Zinc Mine announced a public tender for the sale of 50,000 tons of lead - zinc ore [7]. 3.5 Zinc Concentrate Production and Processing Fees - In December 2025, domestic zinc concentrate production was 287,800 metal tons, a month - on - month decrease of 7.58% and a year - on - year increase of 5.85%. The cumulative production from January to December was 3.657 million tons, a cumulative year - on - year decrease of 1.21%. The production in January 2026 is expected to be 292,600 tons. The domestic zinc concentrate TC has stopped falling and stabilized since late December, with an average of 1,500 yuan/metal ton this week. The import zinc concentrate processing fee index is 25.5 US dollars/dry ton, a week - on - week decrease of 4.25 US dollars/dry ton, and the import profit of zinc ore has dropped to a small loss [10]. 3.6 Zinc Concentrate Import - In December 2025, the import volume of zinc ore and concentrates was 462,500 tons, a month - on - month decrease of 10.87% and a year - on - year increase of 1.15%. The cumulative import volume from January to December was 5.3305 million physical tons, a cumulative year - on - year increase of 30.1%. The main import sources are Peru, Australia, and South Africa. Due to the arrival cycle, the import volume in December decreased, but it is expected to increase significantly in January. As of February 4, 2026, the import profit and loss of zinc concentrate was - 64 yuan/ton, and the zinc ore import window has been closed since January 26 [14]. 3.7 Zinc Concentrate Port Inventory - As of January 29, the weekly inventory of seven major ports was 377,500 tons, a week - on - week increase of 81,000 tons, reaching a three - month high. The arrival volume of zinc concentrate decreased significantly in December, but it increased again in early January after the import window opened in late December [18]. 3.8 Zinc Smelter Production - In January 2026, SMM's refined zinc production in China increased by 8,500 tons month - on - month to 560,600 tons, slightly lower than the initial expectation. The raw material inventory days of domestic smelters in January increased by 1.4 days to 23.7 days. Although the processing fee has only stopped falling and remains at a low level since December, the significant increase in zinc prices in January has repaired the smelter's profit. It is expected that the domestic zinc ingot production in February will decrease by 52,000 - 57,000 tons month - on - month, and the production level is basically the same as that in January after excluding the difference in the number of days in the month. The actual demand will be the key to maintaining the smelter's profit, which needs to be verified during the post - Spring Festival peak season [24]. 3.9 Refined Zinc Import - In December 2025, China imported 8,700 tons of refined zinc and exported 27,200 tons, with a net export of 18,500 tons. The main import countries are Kazakhstan and Iran, and the main export destinations are Taiwan, China, Singapore, and Hong Kong. The domestic zinc ingot spot export window has been closed since mid - December, and the import loss has expanded as of February 5. It is expected that the pattern of tight external and loose internal markets will continue in the first half of 2026, and there is a possibility that the zinc ingot export window may open again [27]. 3.10 Downstream Zinc Processing - The weighted operating rate of domestic zinc downstream primary processing enterprises this week was 39.52%, a week - on - week decrease of 7.16 percentage points, returning to the historical seasonal level. The average holiday days of downstream enterprises are 22 days, an increase of 1 day year - on - year. All enterprises will resume work from late February to early March [29]. - The operating rate of galvanizing enterprises on February 5 was 38.6%, a week - on - week decrease of 7.59 percentage points. The raw material inventory increased slightly, and the finished product inventory decreased. The average holiday days of 34 galvanizing sample enterprises are 20 days, an increase of 1 day year - on - year, and they will resume production from late February to early March [31]. - The operating rate of die - casting zinc alloy enterprises on February 5 was 42.42%, a week - on - week decrease of 3.95 percentage points. The raw material inventory decreased, and the finished product inventory increased. The average holiday days of 20 die - casting zinc alloy sample enterprises are 23.1 days, an increase of 1.1 days year - on - year, and they will resume work around the eighth day of the first lunar month or the Lantern Festival [39]. - The operating rate of zinc oxide enterprises on February 5 was 50.37%, a week - on - week decrease of 8.15 percentage points. The raw material inventory decreased to the historical low level, and the finished product inventory increased to the historical high level. The industry shows obvious differentiation in holiday arrangements, and the downstream orders also show structural differences [45]. 3.11 Domestic Inventory - As of January 30, the total inventory of refined zinc in the Shanghai Futures Exchange was 65,200 tons, a week - on - week decrease of 7,997 tons. As of February 5, the SMM seven - region zinc ingot social inventory was 133,900 tons, a week - on - week increase of 16,700 tons. It is expected that the domestic market will enter the seasonal inventory accumulation period during the Spring Festival, with a peak inventory of about 210,000 tons, and the inventory will start to decline in late March [52]. 3.12 LME Inventory - LME inventory has been increasing in Singapore, Hong Kong, and Kaohsiung warehouses since late October. It reached a recent peak of 112,300 tons on January 19 and then continued to decline slightly. As of February 5, the LME inventory was 107,800 tons, a week - on - week decrease of 1,950 tons. The LME cancellation warrant ratio rose to a three - month high, with 13,275 tons of cancelled warrants. The global visible inventory this week was 234,300 tons, a week - on - week increase of 9,200 tons, showing a seasonal inventory accumulation trend [55]. 3.13 Structure & Arbitrage - Since late January, the domestic spot price has been at a slight discount to the Shanghai zinc main contract. On Thursday this week, the average price in Shanghai was at a discount of 30 yuan/ton to the main 2603 contract, a narrowing of 25 yuan/ton compared with last week. The Contango structure of Shanghai zinc has significantly converged. It is recommended to pay attention to the 4 - 7 inter - period positive arbitrage opportunity [59]. - The outer market has returned to the Contango structure since mid - December. As of February 5, the LME zinc 0 - 3 spread was at a discount of 20.75 US dollars/ton, and the discount range is narrowing. In the case of continuous inventory reduction overseas, the LME market shows an abnormal convex structure, and a positive arbitrage strategy can be considered [62]. - The CashReport and WarrantBandingReport show that the market concentration has increased slightly recently, and there is one position with a 30 - 39% warrant holding [63].

Group 1 - The core viewpoint indicates that despite a decline in the US stock market, the weakening US dollar provides price support for zinc, with a slight increase in London zinc prices by 0.14% [1][2] - The domestic TC (treatment charge) remains low, and the supply tightness in the mining sector persists, which supports zinc prices [1][2] - The market sentiment is cautious due to the potential delay of non-farm payroll data caused by the US government shutdown, leading to a lack of macroeconomic guidance [2] Group 2 - The zinc concentrate market is expected to tighten initially and then loosen by 2025, as overseas mines recover and new mines come online, leading to a rise in TC and a shift in industry profits towards the smelting sector [2] - Domestic northern mines are undergoing seasonal maintenance, which has closed the import window due to the low Shanghai-London zinc price ratio, prompting smelters to rely on domestic ore [2] - Despite a strong demand for raw materials from smelters, the upcoming Chinese New Year may lead to increased holidays and reduced operating rates, putting pressure on zinc prices [2]

Group 1: Report Industry Investment Rating - Unilateral strategy: Neutral [5] - Arbitrage strategy: Neutral [5] Group 2: Core View of the Report - The weakening of the US dollar and the Middle - East crisis have led to a rise in zinc prices, but high prices have dampened downstream procurement enthusiasm, causing the spot premium to decline [4] - The fundamentals are relatively strong. Although it is gradually entering the consumption off - season, there is no inventory accumulation trend in social inventories [4] - Domestic zinc ore supply remains weak, but winter reserve inventory of domestic smelters is basically completed due to imported ore supplements [4] - Imported ore continues to decline. Before the new - year Benchmark is signed, it is difficult for the imported ore TC to rise [4] - Comprehensive smelting is still facing losses, and the supply pressure of zinc ingots is unlikely to appear [4] - Long - term consumption is still promising, inventory pressure is not high, zinc price valuation is still low, and the callback space of zinc prices is limited even if short - term sentiment weakens [4] Group 3: Summary by Relevant Catalogs Important Data Spot - LME zinc spot premium is -$30.81 per ton [1] - SMM Shanghai zinc spot price rises by 480 yuan/ton to 25,240 yuan/ton, with a spot premium of 5 yuan/ton [1] - SMM Guangdong zinc spot price rises by 480 yuan/ton to 25,300 yuan/ton, with a spot premium of 20 yuan/ton [1] - Tianjin zinc spot price rises by 500 yuan/ton to 25,190 yuan/ton, with a spot premium of - 45 yuan/ton [1] Futures - On January 28, 2026, the main SHFE zinc contract opens at 24,920 yuan/ton and closes at 25,605 yuan/ton, up 605 yuan/ton from the previous trading day [2] - The trading volume for the whole trading day is 284,497 lots, and the holding volume is 118,199 lots [2] - The highest intraday price reaches 25,645 yuan/ton, and the lowest reaches 24,820 yuan/ton [2] Inventory - As of January 28, 2026, the total inventory of zinc ingots in seven SMM regions is 116,800 tons, a decrease of 2,000 tons from the previous period [3] - As of January 28, 2026, the LME zinc inventory is 110,375 tons, a decrease of 175 tons from the previous trading day [3]