1. Report Industry Investment Rating - No information provided in the text 2. Core View of the Report - Short - term demand improvement is limited. Under the high domestic inventory and weak macro - environment, zinc may fluctuate weakly. If the downstream peak - season demand improves as expected, zinc inventory reduction will accelerate, and the zinc price is expected to stabilize and gradually rebound. However, if the inventory reduction is less than expected or the macro - negative factors intensify, the zinc price may further decline. Later, attention should be paid to the changes in domestic inventory and the production dynamics of domestic smelters [6] 3. Summary by Relevant Catalogs 3.1 Fundamental Changes - **Processing Fees**: In February 2026, China's zinc concentrate imports were 413,900 tons, a month - on - month decrease of 30.41% and a year - on - year decrease of 10.3%. Domestic northern mines are gradually resuming work, and domestic ore processing fees are stable. But due to geopolitical and transportation disturbances, the arrival volume of imported ore is limited, and the processing fee (TC) has dropped to single - digits. In March, the domestic zinc concentrate processing fee was 1300 - 1700 yuan, a month - on - month increase of 100 yuan; the imported zinc concentrate processing fee was 24.33 dollars per dry ton, a month - on - month decrease of 7.17 dollars. Last week, the domestic zinc concentrate spot processing fee remained at 1400 - 1700 yuan per ton, unchanged week - on - week; the imported zinc concentrate spot processing fee was 5.23 dollars per dry ton, a weekly decrease of 6.02 dollars [2] - **Supply**: In February, China's refined zinc production was 504,600 tons, a decrease of 56,000 tons (about 10%) from January. In March, it is a traditional resumption month. Except for some smelters in Sichuan and Yunnan continuing maintenance, the resumption of production in Inner Mongolia, Jiangxi and other places is smooth, and the supply recovery pressure increases. Although the processing fee is low, with the by - product benefits of sulfuric acid and silver, the smelter's profit is near the break - even line, and the smelter's willingness to actively cut production is extremely low. In February, the refined zinc import volume was 4,518.01 tons, a month - on - month decrease of 81.26% and a year - on - year decrease of 86.58%; the zinc ingot export volume was 3,866.376 tons, a year - on - year increase of 801.8% and a month - on - month increase of 91.55%. Currently, the domestic Shanghai - London price ratio is oscillating slightly higher, the refined zinc export profit window is closed, and imports remain in a loss state [3] - **Consumption**: In February, the real estate market continued to be weak, and infrastructure investment is expected to recover at a low level. However, the growth of the automobile and home appliance industries has slowed down due to the pre - consumption overdraft. In the galvanizing sector, after the end of environmental protection control in the north, large factories are operating at full capacity; export orders are delayed due to geopolitical conflicts, and orders are shrinking. But supported by the "Golden March and Silver April" traditional peak season, the start - up resilience is strong. In the die - casting zinc alloy and zinc oxide sectors, due to the weak demand for galvanized structural parts related to real estate and the meager profits of the tire industry, the improvement is limited. If the terminal orders of die - casting and zinc oxide do not perform better than expected later, there is a risk of a slight decline in the start - up rate. Currently, the zinc price has rebounded slightly, but it has limited stimulation to consumption, and downstream enterprises mainly replenish inventory on - demand at low levels [3] 3.2 Spot and Inventory - **Spot**: As of March 20, the average price of 0 zinc ingots in the Yangtze River spot market was 23,010 yuan per ton. This week, the spot price has declined, and the basis of 0 zinc in the Yangtze River spot market fluctuates between premium and discount to the main contract. The LME zinc spot discount has narrowed, with a discount of - 24.61 dollars [5] - **Inventory**: As of the week of March 20, the LME inventory was 117,200 tons, with a significant weekly increase of 19,675 tons, slightly lower than the average level in recent years. In China, as of March 23, the domestic social inventory was 219,500 tons, and the inventory has started to decline from a high level but is still at an absolute high level in the past four years. As of March 20, the inventory of the Shanghai Futures Exchange was 152,600 tons, a week - on - week increase of 4,918 tons [5]

Group 1: Report Overview - The report focuses on the zinc market, with the current state of zinc being in a volatile state, awaiting further guidance from the demand side [1] Group 2: Fundamental Changes Processing Fees - In December 2025, China's zinc concentrate imports were 462,600 tons, a month - on - month decrease of 10.87%. From January to December 2025, cumulative imports were 5.324 million tons, a year - on - year increase of 30.59%. Although the December imports decreased month - on - month, they remained at a high level in recent years. The domestic mine supply shortage is expected to gradually improve. In March, the domestic zinc concentrate processing fee was 1,300 - 1,700 yuan, a month - on - month increase of 100 yuan; the imported zinc concentrate processing fee was $24.33 per dry ton, a month - on - month decrease of $7.17. Last week, the domestic zinc concentrate spot processing fee remained at 1,400 - 1,700 yuan per ton, unchanged week - on - week, and the imported zinc concentrate spot processing fee was $15.38 per dry ton, a week - on - week decrease of $8.37 [2] Supply - In February 2025, China's refined zinc production was 504,600 tons, a decrease of 56,000 tons (about 10%) compared to January due to the Spring Festival. Some smelters in Sichuan, Inner Mongolia, Hunan and other places carried out regular maintenance or shutdown during the Spring Festival, and the zinc ore processing fee remained at a low level, with the smelters' raw material inventory lower than the same period in previous years. In March, after the Spring Festival, smelters resumed production, but the current domestic and foreign processing fees are still at historical lows. The production profit of smelting enterprises after excluding by - products is about - 2,022 yuan per ton. Even with the by - product benefits of sulfuric acid and silver, smelters are near the break - even point. The supply of smelting enterprises increased month - on - month, but the release space is still limited. In December 2025, the refined zinc imports were 8,700 tons, a month - on - month decrease of 9,500 tons and a year - on - year decrease of 73.4%; the exports were 27,200 tons, with a net export of 18,500 tons. Currently, the domestic Shanghai - London price ratio is oscillating weakly, the refined zinc export profit window is closed, and imports are at a loss [3] Consumption - Last week, the operating rate increased significantly week - on - week. After the Lantern Festival, downstream enterprises gradually returned to work, but the resumption of production was slow. Some enterprises postponed their start - up time due to insufficient orders or meager profits, resulting in the overall operating rate being significantly lower than the same period in previous years. Downstream enterprises are mainly consuming pre - festival stocks and long - term contract arrivals. Although the willingness to replenish inventory at low prices has improved, the overall purchasing sentiment is not high, the spot market transactions are still sluggish, and the discount is running at a low level. Terminal consumption shows a differentiated pattern. Infrastructure investment is expected to recover at a low level, but the growth of the automobile and home appliance industries has slowed down due to pre - consumption overdraft, and the real estate sector is still in the bottom - grinding stage [4] Spot and Inventory - As of March 6, the average price of 0 zinc ingots in the Yangtze River spot market was 24,410 yuan per ton. The spot price oscillated slightly lower this week. The basis of Yangtze River spot 0 zinc against the main contract fluctuated between premium and discount. The LME zinc spot maintained a discount of - $28.21. As of the week of March 6, the LME inventory was 94,800 tons, showing a slight decline and currently lower than the average level in recent years. In China, the zinc inventory increased. As of March 9, the domestic social inventory was 218,200 tons, continuously accumulating and at a high level in the past four years. As of March 6, the SHFE inventory was 134,000 tons, an increase of 8,869 tons week - on - week [6] Group 3: Market Outlook - The LME inventory has slightly decreased, but the overseas zinc inventory has increased significantly compared to the low point in the fourth quarter of last year. The spot maintains a discount pattern, and the boosting effect of low inventory on zinc prices has weakened. In China, the Shanghai - London price ratio has declined, the import of ores is limited due to deeper losses, and enterprises mainly rely on domestic ores for production. The domestic processing fee has stopped falling, but the import processing fee continues to weaken, and the shortage of ore supply has not been significantly improved. After the Spring Festival in March, smelters resumed production, and the supply of smelting enterprises increased month - on - month, but the current domestic and foreign processing fees are at historical lows, and the release space is still limited. The import and export windows remain closed, and the import loss has widened. In terms of demand, after the Lantern Festival, downstream enterprises gradually returned to work, but the resumption of production was slow. Some enterprises postponed their start - up time due to insufficient orders or meager profits, resulting in the overall operating rate being significantly lower than the same period in previous years. Downstream enterprises are mainly consuming pre - festival stocks and long - term contract arrivals. Although the willingness to replenish inventory at low prices has improved, the overall purchasing sentiment is not high, the spot market transactions are still sluggish, and the discount is running at a low level. Overall, in the short term, the growth space of supply is limited, but the improvement of domestic demand is limited. The spot maintains a discount, and the high - level inventory puts pressure on zinc prices. However, as the peak season approaches in the second half of the month, with the expectation of accelerated recovery of downstream demand, China is expected to reduce inventory, and zinc prices may have the impetus to rebound. Later, attention should be paid to domestic demand and inventory conditions [7]

1. Report Industry Investment Rating - No relevant information provided 2. Core View of the Report - The previous trading day saw Shanghai zinc oscillating and falling, closing with a negative line, with an increase in trading volume. Both long and short positions reduced, with more long - position reductions. Overall, it was a volume - shrinking decline. The price decline led to active exits of long positions, and short positions also exited to wait and see. The short - term market may oscillate and consolidate. Technically, the price closed above the long - term moving average with strong support. The short - term KDJ indicator declined, operating at the strength - weakness demarcation point. The trend indicator rose, with both long and short forces increasing and in a stalemate. The operation suggestion is that Shanghai zinc ZN2604 will oscillate and weaken [19]. 3. Summary by Related Catalogs 3.1 Fundamental Analysis - In November 2025, global zinc plate production was 1.197 million tons, consumption was 1.168 million tons, with a surplus of 29,000 tons. From January to November, global zinc plate production was 12.7561 million tons, consumption was 13.1065 million tons, with a shortage of 350,400 tons. In November, global zinc ore production was 1.069 million tons, and from January to November, it was 12.1419 million tons, which is bullish [2]. - The basis is +70 with the spot price at 24,440, considered neutral [2]. - On March 3, LME zinc inventory decreased by 1,400 tons to 95,375 tons, and SHFE zinc inventory warrants increased by 2,359 tons to 73,097 tons, considered neutral [2]. - The previous trading day, Shanghai zinc oscillated and fell, closing below the 20 - day moving average, with the 20 - day moving average pointing down, which is bearish [2]. - The main positions are net long, and long positions increased, which is bullish [2]. 3.2 Futures Exchange Zinc Futures Quotes on March 3 - The trading volume of zinc futures on March 3 totaled 275,627 lots, with a turnover of 3.39640435 billion yuan, and the total open interest was 191,866 lots, an increase of 2,428 lots [3]. 3.3 Domestic Main Spot Market Quotes on March 2 - The domestic zinc concentrate spot TC was 1,500 yuan/metal ton, an increase of 200 yuan/metal ton; the imported zinc concentrate comprehensive TC was 30 dollars/ton, unchanged [4]. - The price of 0 zinc in Shanghai was 24,360 - 24,460 yuan/ton, with an average price of 24,410 yuan/ton, a decrease of 90 yuan/ton; in Guangdong, it was 24,220 - 24,320 yuan/ton, with an average price of 24,270 yuan/ton, a decrease of 100 yuan/ton; in Tianjin, it was 24,350 - 24,450 yuan/ton, with an average price of 24,400 yuan/ton, a decrease of 70 yuan/ton; in Zhejiang, it was 24,400 - 24,500 yuan/ton, with an average price of 24,450 yuan/ton, a decrease of 90 yuan/ton [4]. 3.4 National Main Market Zinc Ingot Inventory Statistics (2025/2/12 - 2026/3/2) - As of March 2, 2026, the total social inventory of zinc ingots in China's main markets was 211,900 tons, an increase of 37,700 tons compared to February 24 and 31,600 tons compared to February 26 [5]. 3.5 Futures Exchange Zinc Warrant Report on March 3 - The total zinc warrants on March 3 were 73,097 tons, an increase of 2,359 tons [6]. 3.6 LME Zinc Inventory Distribution and Statistics on March 3 - The total LME zinc inventory on March 3 was 95,315 tons, a decrease of 1,400 tons. The registered warrants were 88,575 tons, and the cancelled warrants were 6,800 tons, with a cancellation ratio of 7.13% [7]. 3.7 National Main City Zinc Concentrate Price Summary on March 3 - The price of 50% - grade zinc concentrate in various regions increased by 20 yuan/ton [9]. 3.8 National Market Zinc Ingot Smelter Price Quotes on March 3 - The price of 0 zinc ingots from various smelters increased by 30 yuan/ton [12]. 3.9 Domestic Refined Zinc Production in January 2026 - The planned production in January was 485,500 tons, the actual production was 479,200 tons, a month - on - month increase of 1.25%, a year - on - year increase of 7.78%, a 1.29% shortfall compared to the planned value, with a capacity utilization rate of 67.02%. The planned production in February was 468,700 tons [15]. 3.10 Shanghai Futures Exchange Member Zinc Trading and Position Ranking on March 3 - The total trading volume of members was 294,247 lots, an increase of 6,022 lots; the total long positions were 65,559 lots, a decrease of 1,163 lots; the total short positions were 67,718 lots, a decrease of 912 lots [18].

Report Information - Report Title: Zinc Industry Weekly Report - Report Date: February 27, 2026 - Author: Chen Naixuan (Z002313) - Reviewer: Tang Yun (Z0002422) Report Industry Investment Rating - Not provided in the given content Core Viewpoints 利多因素 - Global zinc inventories are at a low level overall, with tight supply supporting prices [3] - There is support for the overall consumption intensity, and demand is resilient [3] 利空因素 - Just after the Spring Festival, market trading is light, and downstream demand weakens [3] - There are many production cut plans for zinc smelters, and tight spot supply puts pressure on prices [3] Trading Consultation Viewpoint - It is recommended to pay attention to the change in basis and the support of inventory trends for prices [3] Summary by Directory Processing and Terminal Demand - Galvanized sheet coil: Market sentiment index (weekly), weekly inventory - seasonal, steel mill galvanized sheet coil weekly output - seasonal, galvanized sheet (strip) net export - seasonal, die - cast zinc alloy net import - seasonal data are presented [4] - Color - coated sheet (strip) net export - seasonal and zinc oxide net export - seasonal data are provided [7][8][9] - Real estate - related data including real estate development investment and project progress cumulative year - on - year, sales area cumulative year - on - year and unsold area cumulative year - on - year, 100 large - city land transaction floor area weekly value - seasonal, 30 large - city commercial housing transaction volume - seasonal are shown [10][12][14] - Infrastructure fixed - asset investment (excluding rural households) completion data are presented [15][16] Supply and Supply - side Profits - Zinc concentrate monthly import volume - seasonal, SMM import and domestic zinc concentrate weekly processing fees, SMM zinc ingot monthly output - seasonal, refined zinc enterprise production profit & processing fees, China zinc ingot monthly output + import volume - seasonal, zinc concentrate raw material inventory days, LME zinc inventory total - seasonal, SHFE zinc weekly inventory futures - seasonal, and exchange zinc ingot inventory data are provided [18][20][21] Futures and Spot Market Review - Domestic and foreign zinc price trends, Shanghai zinc main contract trading volume & open interest, LME zinc closing price vs. US dollar index, LME zinc (spot/three - month): premium and discount, LME zinc (spot/three - month): premium and discount - seasonal, zinc ingot three - base basis trend, Tianjin zinc ingot basis - seasonal data are presented [27][28][29]

Core Viewpoint - Goldman Sachs expects a slight surplus in the global zinc market this year, driven by increased mine supply and refined inventory drawdowns, while demand remains stable [1] Group 1: Supply and Demand Dynamics - The investment bank forecasts that mine supply growth will significantly slow down by 2027 and 2028, leading to a potential shortage outside of China [1] - Global zinc demand is projected to grow by approximately 2% in both 2026 and 2027 [1] Group 2: China's Role in the Market - Currently, there is no expectation for China to continuously export zinc to balance the global market, but the country is anticipated to play an increasingly important role in alleviating temporary supply tightness [1] - Future years may see more frequent export arbitrage opportunities from China [1]

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 of the articles indicates that the zinc market is experiencing upward momentum, driven by rising prices in related metals such as tin and nickel, as well as a slight reduction in zinc inventory in Shanghai [1][2] - The London zinc price increased by 1.11%, closing at $3269 per ton, with a trading volume of 9468 lots and an open interest of 230166 lots, reflecting a slight increase [1] - The macroeconomic environment remains unstable due to geopolitical tensions, particularly between the US and Iran, which has led to increased oil prices and a generally optimistic outlook on US monetary policy [1] Group 2 - According to the International Lead and Zinc Study Group (ILZSG), the global zinc market deficit widened from 2800 tons in October to 7700 tons in November [2] - Domestic zinc production is affected by winter shutdowns in northern mines, although the import of zinc concentrate has recently turned profitable, reopening the import window after six months [2] - The domestic zinc smelting industry is facing increased losses, leading to further production cuts, while the market sentiment for zinc concentrate has improved due to the recovery of import price ratios [2]

Group 1 - The LME has suspended the delivery of zinc and lead from Korea Zinc (KZ) due to non-compliance with regulatory requirements in their supply chain responsibility report submitted last year [2][5] - Following the news, zinc prices surged, with the main contract in Shanghai exceeding 25,000 yuan per ton, marking a peak increase of 4.21% [2][3] - KZ's delivery volumes to LME are limited, with only 625 tons of zinc ingots and 5,000 tons of lead ingots currently in LME warehouses, indicating that the impact on global zinc supply and demand may be minimal [5] Group 2 - The zinc market is currently experiencing an overbought condition, with both technical and fundamental indicators suggesting a potential price correction in the short term [2] - On the demand side, high prices are suppressing demand, with domestic downstream operations below seasonal levels since the New Year, and spot premiums for zinc continuing to decline [6][9] - The supply side shows a significant increase in zinc ore imports, with arrivals rising sharply, although processing fees remain at historical lows, indicating a recovery in smelter profits [6][8] Group 3 - The downstream processing rate for zinc has increased slightly to 45.17%, but remains historically low, with seasonal demand not providing effective support for prices [9][12] - Recent inventory trends show a significant reduction in Guangdong, but this may indicate an increase in hidden inventory, limiting the ability to consume stock as the Lunar New Year approaches [12][17] - The rising aluminum prices may have a limited negative impact on zinc alloy processing profits, as manufacturers are adjusting processing fees to account for aluminum price increases [19][20]

1. Report Industry Investment Rating - No information provided in the report 2. Core View of the Report - The short - term view suggests that the Shanghai zinc futures (ZN2602) are expected to oscillate and weaken. The previous trading day saw Shanghai zinc move in an oscillating and falling trend, with shrinking trading volume. Both long and short positions reduced, with more reduction in long positions. Technically, the price is above the moving - average system with strong support, the short - term KDJ indicator is rising and operating in the strong area, while the trend indicator is declining, with the long - position strength decreasing and the short - position strength also decreasing, but the long - position strength has an expanding advantage [22]. 3. Summary by Relevant Catalogs 3.1 Fundamental Analysis - In September 2025, global refined zinc production was 1193500 tons, consumption was 1229200 tons, resulting in a supply shortage of 35700 tons. From January to September, global zinc plate production was 10363200 tons, consumption was 10736900 tons, with a supply shortage of 373700 tons. In September, global zinc ore production was 1163300 tons, and from January to September, it was 9964700 tons, which is a bullish factor [2]. 3.2 Basis Analysis - The spot price is 23450, and the basis is +70, which is a neutral factor [2]. 3.3 Inventory Analysis - On January 2, LME zinc inventory decreased by 1300 tons to 106325 tons compared to the previous day. On December 31, the Shanghai Futures Exchange zinc inventory warrants increased by 32 tons to 42419 tons, which is a neutral factor [2]. 3.4 Market Trend Analysis - The previous day, Shanghai zinc showed an oscillating and falling trend, closing above the 20 - day moving average, and the 20 - day moving average was upward, which is a bullish factor [2]. 3.5 Main Position Analysis - The main net position is short, and short positions increased, which is a bearish factor [2]. 3.6 Futures Market Quotes - On December 31, the trading volume of zinc futures contracts on the futures exchange totaled 254315 lots, with a trading value of 2964739.33. The total open interest was 195442 lots, a decrease of 3790 lots [3]. 3.7 Spot Market Quotes - On December 31, the price of 0 zinc in different regions: in Australia, it was 23400 - 23500 yuan/ton; in Guangdong, 23150 - 23250 yuan/ton; in Tianhuang, 23250 - 23350 yuan/ton; in Zhejiang, 23390 - 23490 yuan/ton [4]. 3.8 Inventory Statistics - From December 22 to December 31, 2025, the total inventory of zinc ingots in major domestic markets first decreased and then increased. Compared with December 25, the total inventory decreased by 0.28 tons, and compared with December 29, it increased by 0.32 tons [5]. 3.9 Warehouse Receipt Report - On December 31, the total zinc warehouse receipts on the futures exchange were 42419 tons, an increase of 32 tons. Among them, the warehouse receipts in Guangdong decreased by 298 tons, and those in Tianjin increased by 330 tons [6]. 3.10 LME Zinc Inventory - On January 2, the LME zinc inventory decreased by 1300 tons to 106325 tons, with a registered warehouse receipt of 97925 tons and a cancelled warehouse receipt of 8400 tons, and the cancellation ratio was 7.90% [8]. 3.11 Zinc Concentrate Price - On January 4, the prices of 50% - grade zinc concentrate in different regions were mostly 20200 - 20300 yuan/ton, except for 19700 yuan/ton in Chifeng [10]. 3.12 Zinc Ingot Smelter Price - On December 31, the prices of 0 zinc ingots from different smelters all increased by 20 yuan/ton, with prices ranging from 23030 to 24030 yuan/ton [13]. 3.13 Refined Zinc Production - In November 2025, the actual production of refined zinc was 496600 tons, a month - on - month decrease of 3.64% and a year - on - year increase of 18.48%. The production was 4.93% lower than the planned value, and the capacity utilization rate was 69.45%. The planned production in December was 477500 tons [16]. 3.14 Zinc Concentrate Processing Fee - On January 4, the domestic zinc concentrate processing fee for 50% - grade was mostly 1400 - 1600 yuan/metal ton, and the imported 48% - grade processing fee was 50 US dollars/dry ton [18]. 3.15 Futures Exchange Member Trading and Position Ranking - On December 31, the total trading volume of zinc futures by members of the Shanghai Futures Exchange was 254621 lots, an increase of 26512 lots. The total long - position volume was 57969 lots, a decrease of 4981 lots, and the total short - position volume was 62972 lots, a decrease of 3241 lots [21].

Report Summary 1. Report Industry Investment Rating No information regarding the report industry investment rating is provided in the given content. 2. Core Viewpoints - The previous trading day saw the Shanghai Zinc futures show a volatile rebound, closing with a positive line. The trading volume shrank, and both long and short positions reduced, with more reduction in long positions. It was a volume - shrinking rebound, indicating that long - position holders were actively exiting while short - position holders were also on the sidelines. The market may experience short - term volatile consolidation. Technically, the price closed above the moving average system with strong support. The short - term KDJ indicator rose and operated in the strong zone, while the trend indicator declined, suggesting a decrease in long - position strength and an increase in short - position strength, with the advantage of long - position holders narrowing. The Shanghai Zinc ZN2512 is expected to have a volatile rebound [19]. 3. Summary by Relevant Catalogs 3.1 Fundamentals - In August 2025, global zinc plate production was 1.1507 million tons, consumption was 1.1717 million tons, resulting in a supply shortage of 21,000 tons. From January to August 2025, global zinc plate production was 9.0885 million tons, consumption was 9.3698 million tons, with a supply shortage of 281,300 tons. In August 2025, global zinc ore production was 1.0696 million tons, and from January to August 2025, it was 8.4457 million tons, presenting a bullish signal [2]. 3.2 Basis - The spot price was 22,760, and the basis was +80, showing a neutral situation [2]. 3.3 Inventory - On November 12, the LME zinc inventory increased by 575 tons to 35,875 tons compared to the previous day, and the Shanghai Futures Exchange zinc inventory warrants increased by 372 tons to 70,890 tons, indicating a bearish factor [2]. 3.4 Market Trends - The previous day, Shanghai Zinc showed a volatile rebound, closing above the 20 - day moving average, with the 20 - day moving average trending upwards, a bullish sign [2]. 3.5 Main Positions - The main positions were net short, and the short positions decreased, which was a bearish signal [2]. 3.6 Futures Market Quotes on November 12 - For different delivery months of zinc futures, details such as opening price, closing price, trading volume, and open interest were provided. For example, for the zn2512 contract, the opening price was 22,565, the closing price was 22,680, the trading volume was 71,426 lots, and the open interest was 105,905 lots with a decrease of 1,570 lots [3]. 3.7 Domestic Spot Market Quotes on November 12 - The domestic spot market quotes included zinc concentrate and zinc ingots. The domestic zinc concentrate spot TC was 2,700 yuan/metal ton, a decrease of 100 yuan/metal ton; the imported zinc concentrate comprehensive TC was 100 US dollars/dry ton, unchanged. The price of 0 zinc in different regions varied, such as 22,760 yuan/ton in Shanghai, 22,530 yuan/ton in Guangdong (a decrease of 50 yuan/ton), 22,655 yuan/ton in Tianjin (a decrease of 40 yuan/ton), and 22,745 yuan/ton in Zhejiang (a decrease of 10 yuan/ton) [4]. 3.8 Zinc Ingot Inventory Statistics in Main Markets - From October 30 to November 10, 2025, the total inventory of zinc ingots in major Chinese markets decreased from 163,200 tons to 161,500 tons. Compared with November 3, the inventory decreased by 800 tons; compared with November 6, it decreased by 100 tons [5]. 3.9 Zinc Warehouse Receipt Report on November 12 - The total zinc warehouse receipts on the futures exchange were 70,890 tons, an increase of 372 tons. Among them, the warehouse receipts in Guangdong increased by 498 tons, while those in Tianjin decreased by 126 tons [6]. 3.10 LME Zinc Inventory Distribution and Statistics on November 12 - The LME zinc inventory had different changes at various locations. The total inventory was 35,875 tons, an increase of 575 tons compared to the previous day. The registered warehouse receipts were 31,950 tons, and the注销 warehouse receipts were 3,925 tons, with a注销 ratio of 10.94% [7]. 3.11 Zinc Concentrate Processing Fees on November 12 - The zinc concentrate processing fees varied by region. For domestic 50% - grade zinc concentrate, the average processing fee was generally around 2,700 yuan/metal ton, with a decrease of 100 - 200 yuan/metal ton in most regions. The imported 48% - grade zinc concentrate processing fee was 100 US dollars/kiloton [17]. 3.12 Shanghai Futures Exchange Member Zinc Trading and Position Ranking on November 12 - For the zn2512 contract, the total trading volume of members was 113,074 lots, a decrease of 11,512 lots. The total long - position volume was 73,076 lots, a decrease of 1,076 lots, and the total short - position volume was 70,165 lots, a decrease of 859 lots. Leading futures companies like CITIC Futures had significant positions in trading volume, long positions, and short positions [18]. 3.13 Domestic Refined Zinc Production in October 2025 - The planned production value in October was 509,600 tons, and the actual production was 524,300 tons, with a month - on - month increase of 4.87% and a year - on - year increase of 18.38%. The production was 2.88% higher than the planned value, and the capacity utilization rate was 73.33%. The planned production for November was 522,300 tons [15].