Report Summary 1. Report Industry Investment Rating - Unilateral: Neutral [4] - Arbitrage: Neutral [4] 2. Core View - The spot market premium in most regions is weakening, and downstream demand remains cautious due to high prices. Although overseas mine production in Q1 was lower than expected, the surplus expectation of zinc ingots remains unchanged. There is still profit in smelting, and supply pressure persists. Consumption in May may face challenges, and attention should be paid to inventory changes [3]. 3. Summary by Related Catalogs Spot and Futures Market - **Spot**: LME zinc spot premium is -$29.83/ton. SMM Shanghai zinc spot price rose by 150 yuan/ton to 22,760 yuan/ton, with the premium falling by 25 yuan/ton to 205 yuan/ton. SMM Guangdong zinc spot price rose by 200 yuan/ton to 22,700 yuan/ton, with the premium rising by 25 yuan/ton to 145 yuan/ton. SMM Tianjin zinc spot price rose by 150 yuan/ton to 22,740 yuan/ton, with the premium falling by 25 yuan/ton to 185 yuan/ton [1]. - **Futures**: On May 21, 2025, the Shanghai zinc main contract opened at 22,530 yuan/ton and closed at 22,580 yuan/ton, up 160 yuan/ton from the previous trading day. The trading volume was 98,502 lots, an increase of 3,796 lots, and the position was 67,175 lots, a decrease of 9,455 lots. The intraday price fluctuated between 22,510 - 22,675 yuan/ton [1]. Inventory - As of May 19, 2025, the total inventory of SMM seven - region zinc ingots was 83,800 tons, a decrease of 1,700 tons from the same period last week. As of May 21, 2025, LME zinc inventory was 157,875 tons, an increase of 1,150 tons from the previous trading day [2]. Market Analysis - In the spot market, inventories in Guangdong are continuously declining, while premiums in other regions are weakening. After the rebound of absolute prices, downstream buyers are still hesitant due to high prices and make inquiries and purchases based on rigid demand. Overseas mine production in Q1 was lower than expected, but the surplus expectation of zinc ingots remains unchanged. Although the increase in TC is limited, smelting still has profits, and the supply pressure persists. Domestic imported ore inventory is sufficient, and domestic ore TC is still rising. Consumption in May may face challenges, and there is a possibility of a sequential decline in consumption after May [3].