1. Report Industry Investment Rating - Not provided in the document 2. Core View of the Report - The report predicts that Shanghai zinc will fluctuate and adjust, with support at 22,900 yuan/ton and resistance at 23,400 yuan/ton [5]. 3. Summary by Relevant Catalogs 3.1. Weekly Key Points Summary - **Market Review**: This week, the main contract of Shanghai zinc fluctuated strongly, with a weekly increase of 0.46% and an amplitude of 1.78%. As of the end of this week, the closing price of the main contract was 23,170 yuan/ton [5]. - **Market Outlook**: Macroscopically, the US has ended the previous administration's trade investigation on Chinese chips and will not impose additional tariffs on Chinese chips for the next 18 months. Fundamentally, upstream zinc ore imports have declined, and domestic smelters' production is expected to decrease significantly. The export window may close again. On the demand side, the downstream market is gradually entering the off - season, with the real - estate sector dragging down, and the infrastructure and home - appliance sectors weakening, while the automobile and other sectors have some policy - supported highlights. Domestic inventories continue to decline, while LME zinc inventories have increased significantly [5]. 3.2. Futures and Spot Market - **Price and Ratio**: As of December 26, 2025, the closing price of Shanghai zinc was 23,170 yuan/ton, up 105 yuan/ton or 0.46% from December 19, 2025. As of December 24, 2025, the closing price of LME zinc was 3,086.5 US dollars/ton, up 13 US dollars/ton or 0.42% from December 18, 2025. The Shanghai - London ratio has rebounded [10]. - **Net Position and Open Interest**: As of December 26, 2025, the net position of the top 20 in Shanghai zinc was 5,746 lots, an increase of 678 lots from December 19, 2025. The open interest was 200,417 lots, an increase of 6,815 lots or 3.52% from December 19, 2025 [16]. - **Price Spreads**: As of December 26, 2025, the aluminum - zinc futures spread was 765 yuan/ton, a decrease of 115 yuan/ton from December 19, 2025. The lead - zinc futures spread was 5,615 yuan/ton, a decrease of 570 yuan/ton from December 19, 2025 [19]. - **Spot Premiums**: As of December 26, 2025, the spot price of 0 zinc ingots was 23,230 yuan/ton, unchanged from December 19, 2025. The spot premium was 55 yuan/ton, a decrease of 100 yuan/ton from last week. As of December 24, 2025, the LME zinc near - month to 3 - month spread was - 28.26 US dollars/ton, a decrease of 6.69 US dollars/ton from December 17, 2025 [25][26]. - **Inventories**: As of December 24, 2025, LME refined zinc inventories were 106,875 tons, an increase of 9,175 tons or 9.39% from December 17, 2025. As of December 19, 2025, SHFE refined zinc inventories were 76,017 tons, a decrease of 4,560 tons or 5.66% from last week. As of December 25, 2025, domestic refined zinc social inventories were 111,400 tons, a decrease of 7,300 tons or 6.15% from December 18, 2025 [29]. 3.3. Industry Situation - **Upstream**: In October 2025, global zinc ore production was 1.1009 million tons, a month - on - month increase of 1.21% and a year - on - year increase of 4.87%. In November 2025, the import volume of zinc ore concentrates was 519,018.96 tons, a month - on - month increase of 52.31% and a year - on - year increase of 14.06% [35]. - **Supply - Side**: - **Global Supply Gap**: In October 2025, global refined zinc production was 1.2187 million tons, with a year - on - year increase of 108,400 tons or 9.76%. Consumption was 1.2193 million tons, a year - on - year increase of 44,200 tons or 3.76%. The global refined zinc gap was 600 tons, compared to a gap of 64,800 tons in the same period last year. The WBMS reported a global zinc market supply - demand balance of - 35,700 tons in September 2024 [40][41]. - **Production Forecast**: In November 2025, zinc production was 654,000 tons, a year - on - year increase of 13.3%. From January to November 2025, the cumulative zinc output was 6.842 million tons, a year - on - year increase of 9.5%. However, production is expected to decline [44]. - **Export Window**: In November 2025, the import volume of refined zinc was 18,229.93 tons, a year - on - year decrease of 48.15%. The export volume was 42,815.55 tons, a year - on - year increase of 8748.45% [47]. - **Downstream**: - **Galvanized Sheets**: From January to November 2025, the inventory of galvanized sheets (strips) of major domestic enterprises was 942,600 tons, a year - on - year increase of 9.06%. In November 2025, the import volume of galvanized sheets (strips) was 36,700 tons, a year - on - year decrease of 19.91%. The export volume was 317,900 tons, a year - on - year increase of 11% [50][51]. - **Real Estate**: From January to November 2025, the new housing construction area was 534.567 million square meters, a year - on - year decrease of 20.58%. The housing completion area was 394.5393 million square meters, a year - on - year decrease of 17.58%. The funds in place of real - estate development enterprises were 8.514519 trillion yuan, a year - on - year decrease of 11.9%. Personal mortgage loans were 1.1786 trillion yuan, a year - on - year decrease of 15.1% [56][57]. - **Infrastructure**: In November 2025, the real - estate development climate index was 91.9, a decrease of 0.52 from last month and 0.61 from the same period last year. From January to November 2025, infrastructure investment increased by 0.13% year - on - year [62][63]. - **Home Appliances**: In November 2025, the refrigerator production was 9.442 million units, a year - on - year increase of 5.6%. From January to November 2025, the cumulative refrigerator production was 99.342 million units, a year - on - year increase of 1.2%. In November 2025, the air - conditioner production was 15.026 million units, a year - on - year decrease of 23.4%. From January to November 2025, the cumulative air - conditioner production was 245.361 million units, a year - on - year increase of 1.6% [65]. - **Automobiles**: In November 2025, China's automobile sales volume was 3,428,998 units, a year - on - year increase of 3.4%. The automobile production volume was 3,531,579 units, a year - on - year increase of 2.76% [70].

Report Summary 1. Industry Investment Rating No investment rating is provided in the report. 2. Core Viewpoints - In Q4 2025, the TC of zinc ore continued to decline, strengthening the expectation of domestic smelter production cuts. The opening of the zinc ingot export window reduced the pressure of domestic zinc ingot inventory accumulation. The high spread between the domestic and overseas markets attracted attention, with domestic smelters and traders actively seeking exports. The LME zinc has limited room for further significant upside. - There is a need for profit - taking of cross - market long - spread funds, while the participation enthusiasm of cross - market short - spread funds is currently limited. It is a good opportunity to enter cross - market short - spread trades as the inventory difference between domestic and overseas markets has shown signs of convergence, and the fundamentals no longer support the further expansion of the spread. The spread is expected to converge to the range of 1,000 - 1,500 yuan/ton. - The high - low rotation of funds has spread from the stock market to the futures market, and a rebound of oversold varieties can be expected. In Q4, Shanghai zinc is not recommended as a short - allocation. The rebound height is temporarily seen at the annual line of 23,200 yuan/ton. It is unlikely to rebound to the high - level range of 24,200 yuan/ton at the beginning of the year unless the domestic deflation expectation is broken and overseas consumption exceeds expectations. - The price range of Shanghai zinc in Q4 is expected to be 22,200 - 23,200 yuan/ton, and the price range of LME zinc is 2,900 - 3,100 US dollars/ton. [73][74] 3. Summary by Relevant Catalogs 3.1 Zinc Price History and Current Situation - Historically, factors such as the European debt crisis, US QE policies, mine shortages, and changes in TC have affected zinc prices. In 2025, the zinc market has complex supply - demand and price relationships. The LME zinc inventory is 35,300 tons, SMM zinc inventory is 159,600 tons, and the smelter raw material inventory is 26 days. The LME 0 - 3 month premium is 117.04 US dollars. [5][21] - In 2025, from January to July, China's zinc ingot production was 3.8425 million tons, a year - on - year increase of 4.65%. From January to September, the output was 5.0685 million tons, a year - on - year increase of 8.83%. However, some overseas refineries have reduced production due to factors such as low TC and profit problems. In H1 2025, the overall output of major overseas refineries decreased by 89,900 tons year - on - year, a decline of 4.34%. [28][29][39] 3.2 Market Factors - **Supply - side factors**: New domestic mines such as Huoshaoyun, Russia's OZ mine, and Congo's Kipushi lead - zinc mine have been put into production, effectively alleviating the raw material constraints on domestic refineries. However, overseas refineries' profit recovery will lead to competition for mines between overseas and domestic refineries. [30][41] - **Demand - side factors**: The real estate market has shown signs of weakness, with a decline in real estate investment and a mixed situation in housing sales. The photovoltaic industry has passed the high - growth stage, and the growth rate of new installed capacity has slowed down. However, the export of galvanized sheets has increased, with the cumulative export of 10 - tariff - number galvanized sheets from January to September 2025 reaching 10.42 million tons, a year - on - year increase of 9.61%. [62][64][58] - **Policy factors**: The import and export tariffs of zinc products have been adjusted. For example, the export tariff of 0 zinc is 20%, but the provisional tariff in 2025 is 0%. The export of zinc ingots is subject to a 13% VAT, and the export tax rebate has been cancelled since 2008. [34][35] 3.3 Trading Strategies - **Cross - market arbitrage**: Cross - market short - spread is recommended as the inventory difference between domestic and overseas markets is converging, and the fundamentals no longer support the further expansion of the spread. - **Unilateral trading**: For LME zinc, beware of sudden warehouse deliveries due to low inventory. The upside space above the 3,100 - dollar integer mark is limited, so short - allocation on rallies is recommended. For Shanghai zinc, it is expected to fluctuate at a low level. In Q4, short - allocation is not recommended. Look for short - allocation opportunities above 23,000 yuan/ton or short - term long positions on pullbacks. - **Inter - period trading**: Due to the weak current situation and unclear prospects for expectation repair, the inter - period spread is difficult to widen, maintaining a normal positive market structure, and there are no inter - period arbitrage opportunities. [74][75]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - After major macro - events are settled, the market shifts to fundamentals. In November, both supply and demand are weak. The reduction in processing fees strengthens cost support. The decline in refined zinc output and zinc ingot exports alleviate the high - supply pressure. Although demand is marginally weakening, it still has resilience. The pattern of low inventory and strong structure of LME zinc is difficult to reverse in the short term, which will continuously support the zinc market. It is expected that the center of zinc prices will move up in November [3][70]. 3. Summary According to the Directory 3.1 Zinc Market Review - In October, the main contract of SHFE zinc generally continued to oscillate in a low - level range. Macro and micro factors were intertwined. With the settlement of major macro - events at the end of the month, market sentiment improved, driving up risky assets such as non - ferrous metals. The contradiction in the fundamentals focused on the change of zinc ingot exports. The SHFE - LME ratio dropped to an extreme value, strengthening the expectation of zinc ingot exports, but the export efficiency was low, making the SHFE zinc trend stalemate. By the end of the month, the futures price closed at 22,355 yuan/ton, with a monthly increase of 2.43%. - LME zinc's oscillation center continued to move up. In the middle of the month, it was suppressed by the rebound of the US dollar. After a phased adjustment, it found support near the 40 - day moving average. At the end of the month, the risk of short - squeeze overseas intensified, and the LME 0 - 3 spot premium refreshed the high since 1997. LME zinc turned strong again, breaking through $3,000/ton and finally closing at $3,050/ton, with a monthly increase of 3.16% [8]. 3.2 Macro - aspect 3.2.1 US Aspect - The US economic growth rate declined. In October, the ISM manufacturing PMI index was 48.7, lower than the expected 49.5. The employment market was weak, and inflation data was lower than expected. - The Fed cut interest rates by 25BP in October, in line with expectations, and announced to stop balance - sheet reduction on December 1st. But Powell's post - meeting statement was hawkish, and the market significantly lowered the expectation of continuous interest - rate cuts in December. - At the end of October, the meeting between the Chinese and US presidents led to a phased agreement, which eased the trade situation and was beneficial to market risk appetite. However, the US government shutdown, data delays, and the hawkish attitude towards interest - rate cuts put pressure on risky assets [11][12]. 3.2.2 Eurozone Aspect - The Eurozone economy recovered, but the sustainability of the recovery was to be observed. In October, the manufacturing PMI was 50.0. The GDP growth rate rebounded quarter - on - quarter but slowed year - on - year. The employment market was stable, and inflation declined slightly. - The ECB maintained key interest rates unchanged for the third consecutive time in October and emphasized a data - dependent policy path. The economic recovery and inflation differences among countries increased the policy divergence within the ECB, and it was expected to be more cautious than the Fed [13]. 3.2.3 Domestic Aspect - The domestic economic downward pressure increased. The GDP growth rate in the third quarter slowed down, and economic data in September was further differentiated. The export and production sectors were strong, while consumption and investment were weak. - The Fourth Plenary Session of the Central Committee and the release of the "15th Five - Year Plan" construction opinions injected long - term confidence into the market. Although the economic recovery slowed down, the probability of achieving the annual GDP growth target was high, and mild policies were still expected [14][15]. 3.3 Zinc Fundamental Analysis 3.3.1 Zinc Ore Supply Situation - **Global Zinc Concentrate Supply Recovery**: From January to August 2025, the cumulative output of global zinc concentrates was 8.297 million tons, with a cumulative year - on - year increase of 6.5%. Overseas zinc mines maintained stable production, and it was expected that the overseas zinc concentrate increment would be about 550,000 tons for the whole year. In China, the zinc concentrate output in September was 314,500 tons, with a month - on - month decrease of 8.8% and a year - on - year decrease of 10%. It was expected to continue to decline in November [23][26]. - **Adjustment of Domestic and Overseas Processing Fees and High - level Zinc Ore Imports**: In November, the average domestic zinc concentrate processing fee was 3,000 yuan/ton, with a month - on - month decrease of 650 yuan/ton. The average import ore processing fee was $105.54/dry ton, with a month - on - month increase of $18.03/dry ton. The import of zinc concentrates remained at a high level, but the growth space was limited [29][30]. 3.3.2 Refined Zinc Supply Situation - **Increased Production Expectation of Overseas Refineries and High - level Domestic Supply**: From January to August 2025, the global refined zinc output was 9.138 million tons, with a cumulative year - on - year increase of 0.03%. Domestic production was stable, and new capacities gradually released output, while overseas refineries contributed to the main reduction. In the fourth quarter, some overseas refineries had the expectation of resuming and increasing production, but the willingness to significantly increase production was still insufficient [33][34]. - **High - level Monthly Output of Refined Zinc from January to November and Increased Expectation of Zinc Ingot Exports**: In October, the refined zinc output was 617,200 tons, with a month - on - month increase of 2.85% and a year - on - year increase of 21.45%. It was expected to decrease by 0.94% to 611,400 tons in November. The import of refined zinc was expected to have no increment, while the export window opened intermittently, and the export volume was expected to increase significantly [39][40]. 3.3.3 Refined Zinc Demand Situation - **Marginal Recovery of Terminal Consumption in Europe and the US with Uncertain Sustainability**: From January to August 2025, the global refined zinc consumption was 9.0216 million tons, with a cumulative year - on - year increase of 2%. Overseas consumption increased by 1.35% year - on - year, and domestic consumption increased by 2.78% year - on - year. The supply surplus in the global zinc market expanded [47]. - **Weak Performance of Initial - stage Enterprises'开工率 and Resilience of Galvanized Exports**: In October, the开工率 of initial - stage galvanizing and zinc oxide enterprises was at a relatively low level, and that of die - casting alloy enterprises was at a neutral level. It was expected to decline in November. The export of galvanized sheets in September was 1.2262 million tons, with a month - on - month increase of 11.73% and a year - on - year increase of 2.27%. It was expected to decline in October [52][53][54]. - **Weak Traditional Consumption and Differentiated Emerging Consumption**: In traditional consumption, the infrastructure investment growth rate declined, and the real estate sector continued to be weak. In the automotive sector, production and sales were good. In the white - goods sector, the air - conditioner market faced challenges, and the production plan for November was adjusted downward. In the emerging consumption sector, the decline in the growth rate of photovoltaic installed capacity narrowed, and the wind power sector was expected to have positive growth in the fourth quarter [55][61][62]. 3.3.4 Differentiated Domestic and Overseas Inventories - The LME inventory accelerated to decline since mid - July. In October, the LME 0 - 3 spot premium soared, and the inventory decreased to 35,300 tons by the end of the month. It was expected to stabilize and slightly rebound but remain at a low level. - The domestic social zinc ingot inventory was at a high level in October, reaching 161,500 tons. It was expected to remain high, but if the zinc ingot export efficiency improved, the inventory pressure might be relieved [65]. 3.4 Summary and Outlook - Macro - aspect: The Sino - US phased agreement and the Fed's October interest - rate cut were in line with expectations, but the uncertainty of the December interest - rate cut increased. The domestic economic recovery slowed down, and mild policies were expected. The Fourth Plenary Session and the "15th Five - Year Plan" provided long - term confidence. - Supply - side: Northern mines entered the seasonal production off - season, and the processing fees decreased, strengthening cost support. The refined zinc supply was expected to decrease slightly, and the supply - side pressure was marginally relieved. - Demand - side: Terminal consumption was flat, with pressure on infrastructure and real estate. The automotive sector continued to improve, and the consumption in the photovoltaic and wind - power fields was strong. In November, the consumption entered the off - season transition period, and the initial - stage enterprises'开工率 was expected to decline moderately. - Overall: In November, both supply and demand were weak. The reduction in processing fees and zinc ingot exports alleviated the supply pressure, and the demand had resilience. The low - inventory and strong - structure pattern of LME zinc would support the zinc market, and the zinc price center was expected to move up [70].

Core Insights - The International Lead and Zinc Study Group (ILZSG) reported a global zinc market surplus of 72,000 tons for the period of January to July 2025, a decrease from a surplus of 185,000 tons in the same period of 2024 [1] Summary by Category Production and Consumption - Global refined zinc production for January to July 2025 is recorded at 7,915,000 tons, slightly up from 7,864,000 tons in the same period of 2024 [1] - Global refined zinc consumption for January to July 2025 reached 7,843,000 tons, an increase from 7,679,000 tons in the same period of 2024 [1] Supply-Demand Balance - The supply-demand balance for global refined zinc shows a surplus of 72,000 tons for January to July 2025, compared to a surplus of 185,000 tons in the same period of 2024 [1] - The overall supply-demand balance for the year 2024 was a deficit of 156,000 tons, while in 2023, there was a surplus of 284,000 tons [1]