Report Overview - Report Title: Nanhua Futures Zinc Risk Management Report - Date: September 25, 2025 - Research Team: Nanhua Non-ferrous Metals Research Team [1] Report Industry Investment Rating - Not provided in the given content Core Views - The zinc price rebounded slightly following the broader market in the previous trading session. The supply side remains in a surplus state. On the mine side, due to the internal and external price ratio, domestic mines have a significant price advantage, and the increase in domestic processing fees slowed down in September. Overseas mines have seen a substantial increase this year, showing a loose supply situation. In terms of imports, due to the weak production capacity of overseas smelters, the increase in overseas refined zinc is limited, while zinc ore imports are at a multi-year high. On the demand side, the inventory in seven domestic regions continues to accumulate, and no peak-season phenomenon has been observed. In the short term, affected by typhoons, the downstream operating rate is expected to decline slightly. The LME inventory continues to decrease, and the pattern of stronger overseas and weaker domestic zinc prices in terms of inventory is becoming more obvious. In terms of trading strategies, the internal and external reverse arbitrage can continue to wait and see as the LME inventory approaches its extreme value. Currently, the internal and external positive arbitrage logic for zinc ingots prevails. In the short term, the price will mainly fluctuate based on macroeconomic factors and consumption [3]. Summary by Relevant Catalogs Zinc Price Volatility and Risk Management Recommendations - **Zinc Price Volatility**: The latest zinc price is 22,045, with a predicted range of 21,000 - 23,500. The current volatility is 7.74%, and the current volatility's historical percentile is 3.0% [2]. - **Risk Management Recommendations**: - **Inventory Management**: For those with high finished product inventory worried about price drops, it is recommended to short the main Shanghai zinc futures contract at a hedging ratio of 75% with an entry range of 22,700. There is no current recommendation for Shanghai zinc options [2]. - **Raw Material Management**: For those with low raw material inventory worried about price increases, it is recommended to long the main Shanghai zinc futures contract at a hedging ratio of 50% with an entry range of 21,700. There is no current recommendation for Shanghai zinc options [2]. Core Contradictions - The zinc price rebounded slightly following the broader market. The supply side is in surplus, with domestic mines having a price advantage and overseas mines having a large increase. The increase in overseas refined zinc is limited, and zinc ore imports are high. The domestic inventory is accumulating, and the downstream operating rate may decline slightly due to typhoons. The LME inventory is decreasing, and the price pattern is stronger overseas and weaker domestically. The internal and external positive arbitrage logic prevails, and the price will mainly fluctuate in the short term [3]. Factors Affecting the Market - **Likely Positive Factors**: - Overseas inventory is continuously decreasing (high probability, medium impact) [4]. - The Fed cuts interest rates more than expected (low probability, high impact) [4]. - The mine processing fee decreases (low probability, medium impact) [4]. - **Likely Negative Factors**: - Demand is weak, and peak-season consumption falls short of expectations (medium probability, medium impact) [6]. - Domestic inventory accumulates (medium probability, medium impact) [6]. - Import volume exceeds expectations year-on-year (low probability, low impact) [6]. Market Data - **Zinc Spot Prices**: The average price of SMM 0 zinc is 21,870 yuan/ton, up 50 yuan or 0.23% daily. The average price of SMM 1 zinc is 21,800 yuan/ton, up 50 yuan or 0.23% daily [7]. - **Zinc Futures Prices**: The main Shanghai zinc futures contract closed at 22,045 yuan/ton, up 185 yuan or 0.85% daily. The LME zinc closed at 2,938 US dollars/ton, up 49.5 US dollars or 1.71% daily [7]. - **Zinc Futures Inventory**: The total Shanghai zinc warehouse receipts are 56,583 tons, down 774 tons or 1.35% daily. The total LME zinc inventory is 44,400 tons, down 1,375 tons or 3% daily [7]. Other Data - **LME Zinc Position and Warehouse Receipt Data**: - **LME Zinc Position**: The distribution of long and short positions in different ranges is provided [19]. - **LME Zinc Warehouse Receipts**: The number of warehouse receipt holders in different ranges is provided [19]. - **Zinc Concentrate Processing Fees**: A comparison of domestic and imported zinc concentrate processing fees is presented [21].

Report Industry Investment Rating - No relevant content provided Core View of the Report - The trading sentiment in the zinc market has cooled significantly in the previous trading session, with long upper shadows in the past four days indicating weak short - term price support. While the fundamental logic remains unchanged, the supply side exerts continuous pressure, and the demand side remains stable in the short term. The inventory and spot traders still provide support, but significant short - to medium - term price increases are unlikely. It is advisable to wait and observe the impact of macro - policies and when the loose supply will confirm the bearish logic [2] Summary by Related Catalogs Zinc Price Volatility and Forecast - The latest zinc price is 22,190 yuan/ton, with a forecast range of 21,500 - 22,800 yuan/ton. The current volatility is 21.19%, and the historical percentile of the current volatility is 74.8% [1] Zinc Risk Management Suggestions Inventory Management - For those with high finished - product inventory worried about price drops, it is recommended to short 75% of the Shanghai Zinc main futures contract at an entry range of 22,700 yuan/ton [1] Raw Material Management - For those with low raw - material inventory worried about price increases, it is recommended to long 50% of the Shanghai Zinc main futures contract at an entry range of 21,700 yuan/ton [1] Factors Affecting Zinc Prices Bullish Factors - The inventory is at a historically low level; there are interest - rate cuts and consumption - friendly policies; overseas mines are affected by tariffs [3] Bearish Factors - There is sustained macro - panic sentiment; downstream buyers purchase at low prices, resulting in insufficient price support; the import window is open, and the supply is expected to be sufficient [4] Zinc Price and Inventory Data Zinc Spot Prices - The SMM 0 zinc average price is 22,850 yuan/ton, up 80 yuan (0.35%) from the previous day; the SMM 1 zinc average price is 22,780 yuan/ton, up 80 yuan (0.35%) [5] Zinc Futures Prices - The Shanghai Zinc main contract price is 22,190 yuan/ton, up 15 yuan (0.07%); the LME zinc closing price is 2,619 US dollars/ton, up 2.5 US dollars (0.1%) [5] Zinc Futures Inventory - The total Shanghai Zinc warehouse receipts are 1,903 tons, down 150 tons (-7.31%); the total LME zinc inventory is 170,650 tons, down 750 tons (-0.44%); the total LME registered zinc warehouse receipts are 103,875 tons, down 17,150 tons (-14.17%) [5]