Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - The zinc price will maintain a wide - range oscillation throughout 2026. The price will be relatively strong in the first half of the year due to the structural shortage of domestic raw materials, and the center of gravity may move slightly downward in the second half as the incremental supply is fully transmitted to zinc ingots [1]. - The global zinc mine is entering an expansion cycle (with an expected increase of 290,000 tons), but the domestic market will still be in a tight - balance state in the first half of the year. Driven by the repair of TC, the smelting output will show a trend of "first decreasing and then increasing", with an expected year - on - year growth of over 4.5% for the whole year, and the supply pressure will gradually shift from the mine end to the ingot end [1]. - Although affected by the real estate industry, at the beginning of the "15th Five - Year Plan", infrastructure (UHV, wind power) and high - end manufacturing (new energy vehicle exports) will significantly increase the zinc consumption density, effectively offsetting the decline in real estate. The actual consumption is expected to maintain positive growth and achieve a soft landing [1]. - The core fluctuation range of the SHFE Shanghai zinc main contract in 2026 is predicted to be between 21,500 - 24,800 yuan/ton, and the LME zinc will fluctuate between 2,750 - 3,350 US dollars/ton. In the first half of the year, the domestic market will be stronger than the overseas market, and the price is likely to rise. In the second half, with the arrival of imported ores, the increase in TC will drive smelters to release production. Coupled with the potential drag from the real estate completion end, supply - demand pressure will gradually emerge, and the price center of gravity may decline under pressure [1]. Summary by Relevant Catalog Chapter 2: Market Review - In the first three quarters of 2025, zinc prices fluctuated widely due to repeated macro - expectations and mismatches in industrial supply - demand rhythms. In Q1, the shortage of mines supported the price increase. In Q2, trade frictions and the strong US dollar led to a significant price correction. In Q3, the supply - demand mismatch between domestic and overseas markets led to a resistance - style upward trend with the overseas market stronger than the domestic one [3]. - In Q4, the structural contradiction in the global zinc market reached an extreme. The market shifted from unilateral gambling to cross - market arbitrage. The large gap between domestic and overseas inventories opened the export profit window for Chinese zinc ingots. The export - driven marginal inventory reduction became the core variable affecting price fluctuations, and the market established a pattern of re - balance through exports [5]. Chapter 3: Supply Side 3.1 Zinc Concentrate - In 2025, global zinc mine supply recovered. The annual output is expected to reach 12.51 million tons, a year - on - year increase of 4.6%. In 2026, the output is expected to continue to grow by 2.27% to 12.61 million tons [12]. - Overseas mine production is growing steadily, driven by the resumption of old capacities and the ramping - up of new mines. Key mining enterprises such as Glencore, Ivanhoe Mines, and Teck Resources have good production performance. In 2026, the global new zinc mine increment is about 290,000 tons, and the market will be in a tight - balance state [14][15]. - The overall cost center of global zinc mines has shifted upward. The 90 - percentile line (about $2,400 - $2,550/ton) is considered a long - term "price bottom". If the zinc price falls below this line, about 10% of high - cost mines will face cash - flow losses and trigger passive production cuts [17]. - In 2025, domestic zinc concentrate supply was sufficient in general, but production was affected by environmental and safety inspections at the end of the year. In 2026, new and resumed projects are expected to contribute about 60,000 tons of output (excluding Huoshaoyun). The Huoshaoyun lead - zinc mine needs attention regarding the commissioning of supporting smelters [22]. 3.2 Smelting End - From 2024 to the first half of 2025, the global zinc smelting industry was in a difficult situation due to the extreme shortage of mine supply. In the second half of 2025, with the supplement of imported ores and the increase in TC, domestic smelters' production willingness was positive. The cumulative zinc ingot output from January to October was 5.686 million tons, a year - on - year increase of 10.1%, and the annual output is expected to be 5.9 million tons, a year - on - year increase of 11.5% [35]. - In 2026, the long - term benchmark TC is expected to rise significantly. Domestic smelting capacity can be released with high elasticity, but the supply pressure is expected to be less than that in 2025 [35]. - For overseas smelters, high and volatile energy costs in Europe are a major risk. Other regions such as South Korea, Japan, and Canada are expected to maintain high and stable operating rates. Globally, the refined zinc output is expected to grow by 3% to 14.12 million tons in 2026, indicating a gradual entry into the inventory accumulation cycle [38]. 3.3 Import and Export and Internal - External Price Ratio - In 2025, the zinc import window was mostly in a deep - loss state, especially in the second half of the year. From January to October, China's cumulative refined zinc imports were 2.77 million tons, a year - on - year decrease of 26.6%. The reason is the difference in the fundamentals of domestic and overseas markets, with overseas smelters having difficulty in restoring production due to high costs [39]. - In the future, the repair of the price ratio may be a prerequisite for the reversal of TC. With the increase in overseas mine supply and the resumption of smelter production, the shortage of LME zinc will be alleviated, the premium will decline, the price structure will turn to Contango, and the SHFE - LME price ratio will rise, narrowing the import loss [40][41]. Chapter 4: Demand Side - In 2026, China's refined zinc consumption is expected to show a slight increase of 0.5% - 1.5%, and the demand side is expected to be more resilient than the market's concerns about the drag from the real estate industry, achieving a soft landing [43]. 4.1 Real Estate - In 2025, real estate indicators such as new construction, construction, and completion areas all declined. In 2026, the real estate market will continue to drag down the zinc market. The new construction area is expected to maintain a negative growth of - 10% to - 15%, and the decline in the completion area is expected to narrow significantly to about - 10%. The direct drag on zinc consumption is expected to be about - 2.3% to - 2.7% [47][48]. 4.2 Infrastructure - In 2026, infrastructure investment will benefit from the "15th Five - Year Plan" and is expected to maintain a year - on - year growth of 6.8%. UHV grid construction will be a major highlight, and the demand for high - quality hot - dip galvanized pipes will increase significantly, making the infrastructure sector a key factor in stabilizing the demand base [50]. 4.3 Automobile - In 2025, the Chinese automobile market grew strongly, especially in terms of exports and new energy vehicle penetration. In 2026, although the new energy vehicle purchase tax will be reduced from full exemption to half exemption, the decline in battery costs and price competition among car companies will offset the impact of the policy. The output of new energy vehicles is expected to grow by 22.0%. The high - growth of automobile exports will reshape the zinc consumption structure, as export - oriented vehicles have a higher demand for zinc [52][53][54]. 4.4 Home Appliances - In 2026, the home appliance sector is expected to show a stable growth in zinc consumption, with an expected growth rate of 2.5% - 3.0%. This is mainly due to policy - driven replacement demand, the lagging dividend of real - estate completion, and the increasing demand for anti - corrosion materials in emerging markets [59][60]. 4.5 Photovoltaic and Emerging Fields - In 2026, although the growth rate of new photovoltaic installations is expected to decline to 18.0%, the absolute increment is still high. The penetration rate of Zn - Al - Mg alloy - coated brackets will further increase, and the expansion of application scenarios will ensure that the photovoltaic sector continues to contribute to zinc consumption [69]. 4.6 Downstream High - Frequency Demand Indicators - Various downstream high - frequency demand indicators such as galvanized sheet coil inventory, production, and zinc downstream consumption index show certain seasonal trends, which reflect the real - time demand situation in the zinc market [75][77]. 4.7 Inventory - In the first half of 2025, the inventory was at a historical low, and in the second half, the social inventory began to accumulate, but the accumulation rate was lower than expected. This is mainly due to stronger - than - expected demand, the integration of zinc alloy smelting capacity, and the opening of the export window. In 2026, factors affecting inventory include the recovery of the internal - external price ratio and the increase in overseas smelter production due to the rise in TC [79]. Chapter 5: Supply - Demand Balance Sheet 5.1 Global Zinc Concentrate Balance - In 2026, the global zinc concentrate supply is expected to be 12.6094 million tons, a year - on - year increase of 2.27%, and the demand is expected to be 12.6342 million tons, a year - on - year increase of 2.59%. The market will be in a tight - balance state [81]. 5.2 Global Refined Zinc Balance - In 2026, the global refined zinc output is expected to be 14.1215 million tons, a year - on - year increase of 3.01%, and the consumption is expected to be 13.9837 million tons, a year - on - year increase of 1.49%. The market will turn from a shortage to a surplus [82]. 5.3 China's Refined Zinc Balance - In 2026, China's refined zinc output is expected to be 7.172 million tons, a year - on - year increase of 4.55%. The net import is expected to decrease by 100%. The apparent consumption is expected to be 7.172 million tons, a year - on - year increase of 0.84%, and the actual consumption is expected to be 7.07 million tons, a year - on - year increase of 1.00%. The supply - demand surplus is expected to decrease by 8.92% [83].