Summary of Key Points from Conference Call Industry Overview - The conference call primarily discusses the non-ferrous metals industry, focusing on lithium carbonate, nickel, copper, and aluminum markets. Lithium Carbonate Market - **Price Trends**: Lithium carbonate prices have risen significantly due to increased acceptable inventory, shifting market sentiment from pessimism to optimism. The price fluctuation range is expected to be between 100,000 to 180,000 RMB/ton in 2026, with a projected surplus of nearly 100,000 tons [1][10]. - **Supply and Demand Dynamics**: The lithium carbonate market is experiencing a notable increase in visible inventory, with total market inventory rising by 300 tons to 110,000 tons. Smelter inventory increased by 700 tons to 18,000 tons, while downstream inventory decreased by 2,400 tons to 17,000 tons [2]. - **Future Influences**: Key factors affecting lithium carbonate prices include policy changes, financial attributes, and annual supply-demand patterns. The market is currently in a state of excitement, with a significant focus on the impact of battery prices on economic viability [4][6]. Nickel Market - **Current Status**: The nickel market is characterized by a historical oversupply in stainless steel, nickel sulfate, and pure nickel supply chains, with inventories at multi-year highs. The demand from the stainless steel sector remains strong, but the battery sector is under pressure due to the rise of lithium iron phosphate [11]. - **Demand Growth**: Despite the oversupply, the stainless steel industry is expected to continue as the main growth driver, with a projected growth rate of 6.8% in stainless steel production for the first nine months of 2025 [11]. Copper Market - **Supply and Demand Outlook**: The copper market is expected to face a fragile supply situation with stable demand growth. The first quarter of 2026 is anticipated to be particularly tight, with a projected increase in refined copper production of 1.9% globally [12][19]. - **Price Predictions**: Copper prices are expected to remain strong, driven by strategic metal resource narratives and stable demand growth from traditional and emerging sectors [12][19]. - **Long-term Expectations**: Long-term forecasts suggest that copper prices may rise significantly post-2027 due to ongoing supply issues and investment challenges [16][17]. Aluminum Market - **Price Forecast**: Aluminum prices are expected to reach historical highs in 2026 but may not maintain the extreme levels seen at the beginning of the year. The market is anticipated to remain in a tight balance, with a focus on policy changes and emerging demand dynamics [22][30]. - **Demand Trends**: Overall aluminum demand is projected to grow at a rate of over 2%, although significant growth drivers are lacking. The construction sector's performance is expected to improve, but the photovoltaic sector may become a new drag on demand [30]. Additional Insights - **Investment Strategies**: The first quarter of 2026 is seen as a critical period for bullish strategies, with caution advised as the market approaches the Chinese New Year due to potential inventory accumulation [24]. - **Global Inventory Levels**: By the end of 2025, global visible inventory levels have risen to approximately 800,000 tons, indicating a recovery from pandemic-induced low inventory levels [21]. - **Emerging Technologies**: AI investments are expected to have a limited direct impact on copper consumption but may drive demand in the energy sector through increased electricity usage [20]. This summary encapsulates the key insights and projections discussed during the conference call, providing a comprehensive overview of the current state and future outlook of the non-ferrous metals industry.

Group 1 - The core viewpoint is that the global artificial intelligence industry is rapidly growing, which, along with macroeconomic factors, is boosting market sentiment and leading to an expected increase in zinc demand ahead of the Chinese New Year [1][2]. - The London zinc price experienced a slight increase of 0.57%, closing at $3149 per ton, with a trading volume of 11,232 lots, indicating a decrease in trading activity [1]. - Domestic zinc supply remains tight, with zinc concentrate processing fees at low levels, while social inventory of zinc ingots increased by 5.82% to 73,900 tons, reflecting weakened purchasing willingness from downstream due to high zinc prices [2]. Group 2 - The U.S. labor department reported a slowdown in employment growth for December, which supports expectations for the Federal Reserve to maintain interest rates, contributing to positive market sentiment [1]. - The semiconductor industry is projected to reach $75.3 billion in sales by November 2025, marking a year-on-year growth of 29.8%, driven by the ongoing development of the artificial intelligence sector [1]. - The Ministry of Finance and the State Administration of Taxation in China announced the cancellation of VAT export rebates for photovoltaic products starting April 1, 2026, aimed at rationalizing foreign market prices and reducing trade friction risks [2].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Zinc is strongly priced by macro factors, and its price is likely to rise rather than fall. It is rated as neutral to strong in terms of strength analysis [2][6]. - In the long - term, supply - side contradictions will continue to dominate zinc prices, and the expansion of consumption space determines the upside potential of prices. In the short - term, under the influence of strong market sentiment and geopolitical conflicts, the risk premium of non - ferrous metals has increased significantly, and zinc prices are difficult to weaken under the strong macro - pricing logic [6]. 3. Summaries According to Relevant Catalogs 3.1 Market Data - **Price and Price Changes**: The closing price of SHFE Zinc Main Contract last week was 23,970, with a weekly increase of 2.99%. The closing price of LmeS - Zinc 3 last week was 3,149, with a weekly increase of 0.70% [7]. - **Trading Volume and Open Interest Changes**: The trading volume of SHFE Zinc Main Contract last Friday was 143,227, a decrease of 11,716 compared to the previous week, and the open interest was 76,633, a decrease of 9,946. The trading volume of LmeS - Zinc 3 was 15,979, an increase of 8,265, and the open interest was 233,998, an increase of 3,770 [7]. - **Inventory Changes**: Domestic inventories showed a slight accumulation. The SHFE zinc warehouse receipt inventory decreased by 2,946, while the total SHFE zinc inventory increased by 4,059. The social inventory increased by 12,400, and the LME zinc inventory increased by 1,125. The bonded area inventory remained unchanged [7]. - **Fundamental Data**: The import zinc ore processing fee decreased by 6 to 38 dollars/ton, and the domestic zinc ore processing fee remained stable at 1,500 yuan/ton. The import zinc ore smelting profit increased by 2,921 to 38 yuan/ton, and the domestic zinc ore smelting profit increased by 200 to - 1,554 yuan/ton [7]. 3.2 Industry Chain Vertical and Horizontal Comparison - **Inventory**: Zinc ore and smelter finished product inventories have declined from high levels, and zinc ingot visible inventories have decreased [10]. - **Profit**: Zinc ore profits are at the forefront of the industry chain, while smelting profits are at historical lows. Mine enterprise profits have rebounded to a medium - high level in history, smelting profits have rebounded but are still at a low level, and galvanized pipe enterprise profits have remained stable at a medium - low level in the same period [12][13]. - **Production Capacity Utilization**: Zinc smelting production capacity utilization has continued to decline, and downstream production capacity utilization is at a medium - low level in history. Zinc concentrate production capacity utilization has declined to a medium level in the same period, refined zinc production capacity utilization has declined to a medium level in the same period, and downstream galvanizing production capacity utilization has increased, while die - casting zinc and zinc oxide production capacity utilization have declined to a medium - low level [14][15]. 3.3 Trading Aspects - **Spot**: The spot premiums in Guangdong and Tianjin have fluctuated strongly. Overseas premiums have shown differentiation this week, with the premium in Singapore remaining stable, and the premium in Antwerp rebounding. The LME CASH - 3M has fallen from a high level and turned into a C structure [18][19]. - **Price Spreads**: The C structure of SHFE zinc has widened [21]. - **Inventory**: This week, there has been a slight reduction in inventory, and the ratio of open interest to inventory has decreased. LME inventories are mainly concentrated in the Singapore region, with a significant increase in total LME inventories. The ratio of cancelled warrants has dropped significantly to a historical low. The bonded area inventory remained unchanged this week, and the total global visible zinc inventory has increased significantly [26][32][34]. - **Futures**: The domestic open interest is at a medium level in the same period in history [35]. 3.4 Supply - **Zinc Concentrate**: Zinc concentrate imports have rebounded significantly, domestic zinc ore production has decreased, the import ore processing fee has decreased this week, and the domestic ore processing fee has remained stable. The zinc ore arrival volume is at a medium level, and the smelter raw material inventory has rebounded [38][39]. - **Refined Zinc**: Smelting production has declined to a medium level in the same period in history. The smelter finished product inventory has rebounded to a high level in the same period in history, and the zinc alloy production is at a high level [45][46]. - **Recycled Zinc Raw Materials**: No comprehensive summary information is available. 3.5 Demand - **Refined Zinc Consumption**: The consumption growth rate of refined zinc is positive [55]. - **Downstream**: The monthly production capacity utilization of downstream industries has increased slightly, mostly at a medium - low level in the same period in history. The raw material and finished product inventories of downstream industries show different changes [58][60][65]. - **Terminal**: The real estate market is still at a low level, and the power grid shows structural increments [72]. 3.6 Overseas Factors - The prices of European natural gas, carbon allowances, and electricity in different countries show different trends, and the profitability of zinc smelters in different European countries also varies [74][75][77].

1. Report's Industry Investment Rating - Unilateral: Cautiously bullish; Arbitrage: Neutral [6] 2. Core Viewpoints of the Report - The TC of domestic zinc mines continues to decline, and although the zinc ore import window is open due to the convergence of internal and external price ratios after overseas zinc ingot centralized warehousing, the purchasing demand of smelters remains strong, and TC is expected to decline slightly. The current zinc price is undervalued with positive domestic and overseas expectations [1][2] - The production of domestic zinc mines has entered the winter production - reduction cycle, with the output in November 2025 being 311,400 metal tons, 12,000 tons less than expected. The import volume of zinc ore in November 2025 was 519,019 tons, a year - on - year increase of 13.8%, and the cumulative import from January to November was 4,867,942 tons, a year - on - year increase of 33.7%. As of the end of December, the total inventory of the seven major ports in China was 329,000 tons [2] - In December 2025, China's zinc ingot production was 552,000 tons, with a year - on - year increase of 6.85%. It is expected that the production in January will be 569,000 tons, but the actual output may be lower than expected due to the continuous decline of TC. The zinc ingot export window closed in mid - December, but it is still expected to be in a net export state in December. The comprehensive smelting of zinc ingots still faces a loss of about 1,000 yuan/ton. The inventory of zinc ingots has shown a downward trend [3] - The operating rates of galvanizing, die - casting, and zinc oxide have all increased slightly. In November 2025, the net export volume of galvanized strip was 1,188,531 tons, a year - on - year increase of 13.60%, and the cumulative net export from January to November was 12,932,351 tons, a year - on - year increase of 10.88% [4][5] 3. Summary by Relevant Catalogs Zinc Concentrate - In December, the domestic zinc concentrate TC dropped 550 yuan/ton to 1,500 yuan/ton, and the imported zinc concentrate processing fee index decreased from $61.25/ton to $43.75/ton. The price negotiation for January is still ongoing, and it is expected to decline slightly [2] - In November 2025, the domestic zinc concentrate output was 311,400 metal tons, a month - on - month decrease of 19,400 metal tons and a year - on - year increase of 5.24%, 12,000 tons less than expected. It is expected that the output in December will be 320,000 metal tons. The import volume of zinc ore in November 2025 was 519,019 tons, a year - on - year increase of 13.8%, and the cumulative import from January to November was 4,867,942 tons, a year - on - year increase of 33.7% [2] - As of the end of December, the total inventory of the seven major ports in China was 329,000 tons, a month - on - month increase of 27,000 tons. The raw material inventory of smelters was 388,000 metal tons, a month - on - month increase of 11,000 tons, and the available days increased by 1.5 days to 22.3 days, but the available days of inventory are still low [2] Refined Zinc - According to SMM data, in December 2025, China's zinc ingot production was 552,000 tons, a month - on - month decrease of 43,000 tons and a year - on - year increase of 6.85%. It is expected that the production in January will be 569,000 tons, but the actual output may be lower than expected [3] - Due to the opening of the export window, in November 2025, China's net export of zinc ingots was 24,500 tons, and the cumulative net import from January to November was 228,000 tons, a year - on - year decrease of 43%. The zinc ingot export window closed in mid - December, and it is still expected to be in a net export state in December [3] - In terms of smelting profit, both domestic and imported TC have dropped significantly. Although the zinc price is oscillating strongly, the net smelting loss is still - 2,300 yuan/ton, and the comprehensive smelting still faces a loss of about 1,000 yuan/ton [3] - The latest inventory of zinc ingots in seven places is 106,000 tons, with a destocking of 38,000 tons in December. The consumption in the off - season at the end of the year shows resilience. Even after the export window is closed, the inventory still shows a downward trend. The warrant inventory is 42,419 tons, the bonded area inventory is 3,300 tons, and the latest LME inventory is 107,625 tons, with a cumulative inventory increase of more than 50,000 tons in December [3] Consumption End - The operating rate of galvanizing is 57.0%, a month - on - month increase of 0.3%; the operating rate of die - casting is 30.5%, a month - on - month increase of 1.0%; the operating rate of zinc oxide is 42.9%, a month - on - month increase of 0.3% [4] - In November 2025, the net export volume of galvanized strip was 1,188,531 tons, a month - on - month decrease of 8.53% and a year - on - year increase of 13.60%. The cumulative net export from January to November was 12,932,351 tons, a year - on - year increase of 10.88% [5]

Group 1 - The core viewpoint of the articles indicates that the zinc market is experiencing downward pressure due to light trading during the Christmas holiday and falling oil prices, leading to a decline in zinc prices [1][2] - Overnight London zinc futures showed a downward trend, closing at $3087 per ton, down $10 or 0.32%, with a trading volume of 5944 lots, a decrease of 4941 lots [1] - The domestic zinc market is facing tight supply conditions, with a rapid decline in processing fees for imported zinc concentrate, which increases production pressure on smelters [2] Group 2 - The macroeconomic environment is characterized by a cautious market sentiment, influenced by a declining US dollar index and mixed factors such as rising stock markets and falling oil prices [1] - There is a prevailing concern about the future direction of the market as year-end effects become more pronounced, with weak purchasing intentions from downstream sectors leading to poor spot transaction volumes [2] - The expectation is that zinc prices will continue to fluctuate within a range, with a potential decline in current zinc prices due to the lack of strong fundamental drivers and the holiday season affecting overseas markets [2]

1. Report Industry Investment Rating - Zinc: Bullish [1] 2. Core Viewpoints - In 2026, the growth rate of global zinc ore production will decline, and the increment will mainly concentrate in China. The overseas increment will be mainly non - standard ore. The import of zinc ore may be restricted by the price ratio. The mine - smelting balance will tighten, the TC operation center will be lower than in 2025, and the zinc price operation center will be higher [2][165]. - In 2026, domestic zinc smelters are expected to continue to release production capacity, while overseas smelters' resumption of production will be restricted. Domestic demand growth will slow down, with infrastructure still providing support and durable consumption under pressure. External demand, especially from emerging markets, is expected to perform well. The zinc price may maintain a pattern of domestic weakness and overseas strength, and the zinc ingot export window may open periodically [3][165]. - The decline in the TC center will support the zinc price in the long - term. The upper limit of the zinc price depends on demand and the macro - environment. In 2026, the zinc price is expected to rise, with the Shanghai zinc price in the range of 【21600, 25200】 and the LME zinc price in the range of 【2750, 3500】. It is recommended to buy on dips in the medium - term and focus on inter - period reverse arbitrage and internal - external positive arbitrage opportunities [4][170]. 3. Summary by Directory 3.1 Market Review - In 2025, due to the expectation of supply - demand surplus caused by the zinc ore loosening cycle, SHFE zinc became a short - position variety in most capital strategies. The annual shock center of SHFE zinc decreased slightly year - on - year, while that of LME zinc increased marginally. The core reason for the price differentiation between the two was the structural imbalance of the global supply chain [16]. - The cycle from loose zinc ore to loose zinc ingot in 2025 was only half - completed in China, and the overseas half remains to be completed. In 2026, the zinc market story may revolve around overseas smelters' resumption of production, price ratio repair, and improvement in domestic and overseas consumption [17]. 3.2 Supply Side 3.2.1 Mine End - In 2025, overseas mines had a smooth production, and the mine end continued to advance along the loose - cycle. The increment mainly came from overseas mines, and domestic smelters' production capacity release mainly relied on imported ores. The main reasons for the strong performance of overseas mines were the continuous output of resumption and production - increase projects, driven by factors such as the decline in energy prices, fewer extreme weather events, and improved interest - rate environment [20][22]. - From 2025 to 2030, the annual growth rate of zinc ore production is expected to gradually decline, and after 2030, the global zinc ore production will enter a downward channel. In 2026, overseas mines are expected to increase production by about 21.8 million tons, and the increment that can be realized with a high probability is about 12 million tons. In China, domestic zinc ore is expected to enter a production - increasing period, with an expected increment of 21.8 million tons without considering the implementation rate [30][31][37]. - In 2025, China's zinc concentrate import dependence was about 40%, an increase of about 5.8 percentage points compared with 2024. In 2026, domestic zinc concentrate supply may face the problem of import bottlenecks again. The TC center has shifted from a significant upward trend to a downward trend, indicating that the loosest point of zinc ore supply has passed [40][41]. 3.2.2 Smelting End - In 2025, the global zinc ingot production increased slightly year - on - year, showing a pattern of rising in the East and falling in the West. Domestic smelters fully released production capacity, while overseas smelters significantly reduced production. The reasons for overseas smelters' production reduction were the suppression of the benchmark processing fee and the extrusion of domestic smelters' production capacity [49][53]. - In 2026, overseas smelters will mainly focus on resuming production, but the resumption speed may be slow, and the actual zinc ingot increment may be lower than the theoretical calculation, with a neutral expected increment of about 140,000 tons. Domestic smelting production capacity is expected to continue to be released, but the production - increasing space will be relatively limited [59][61]. - In 2025, the proportion of domestic and global recycled zinc production decreased marginally. In 2026, the supply of recycled zinc raw materials may improve marginally, but the increase in recycled zinc production will be limited. In 2025, the import of zinc ingots decreased, and in 2026, the long - term import order volume of zinc ingots may decline significantly, and China may even become a net exporter in some months [67][73]. 3.2.3 Mine - Smelting Balance - In 2026, the overseas zinc ore increment will decline year - on - year, while domestic ore is expected to increase significantly. The mine - end increment is difficult to meet the joint release of domestic and overseas smelting production capacity, and the loosest stage of the mine end may have passed. The TC oscillation center at home and abroad will move down, supporting the zinc price. In the long - term, the resumption environment of overseas smelters in 2026 is still not optimistic [78]. 3.3 Demand Side 3.3.1 Initial - Stage Demand - In 2025, the initial - stage demand for zinc was mediocre, and the downstream operating rate was at a relatively low - to - neutral level. The galvanizing field mainly fluctuated with infrastructure and export demand, while the die - casting zinc alloy was affected by construction demand, and the zinc oxide field showed demand differentiation. The downstream replenishment willingness was still low, and the finished - product inventory was at a low level, indicating strong terminal consumption ability [83][85]. 3.3.2 Traditional Demand - In 2025, the zinc consumption in the infrastructure field improved limitedly. The issuance of new special bonds was relatively stable, but the funds allocated to actual infrastructure projects decreased. The actual operation of infrastructure investment was weak. In 2026, the infrastructure is expected to be optimistic, with an increase in new special bonds and more projects driven by the central government and policies, and the zinc consumption in the infrastructure field is expected to increase by 3.5% year - on - year [96][100][108]. - The real estate is still in the inventory clearance cycle, and the demand for zinc in the construction sector is expected to continue to be dragged down in 2026, but the drag amplitude will be weakened, with an expected zinc consumption growth rate of - 9% [111]. 3.3.3 Durable Consumption Demand - In 2025, the demand for durable consumer goods was strong, mainly driven by policies and exports. In 2026, the domestic demand for automobiles and home appliances may face growth pressure, with an expected growth rate of about 0.5% for automobile zinc consumption and - 2% for home appliance zinc consumption [114][125][127]. 3.3.4 Overseas Demand - In 2025, the export of zinc - processed products increased significantly, and the overseas zinc consumption gradually recovered. In 2026, the export of zinc - processed products is expected to maintain high - level growth, and the overall overseas zinc consumption is expected to grow by 2.8%, especially in emerging regions [135][143][157]. 3.4 Inventory Side - In 2025, the global zinc ingot visible inventory showed an oscillatory decline trend. The increase in domestic social inventory was not enough to offset the decline in LME inventory. The inventory in the industrial chain increased, and the accumulation of domestic social inventory was limited [158]. 3.5 Investment Suggestions - Fundamental Outlook: The mine - smelting balance will tighten, and the zinc price operation center may move up. The zinc ingot balance may show domestic surplus and overseas tightness, and the zinc price may maintain a pattern of domestic weakness and overseas strength [165]. - Trading and Price Outlook: The decline in the TC center will support the zinc price in the long - term. The zinc price is expected to rise in 2026, with the Shanghai zinc price in the range of 【21600, 25200】 and the LME zinc price in the range of 【2750, 3500】. It is recommended to buy on dips in the medium - term, focus on inter - period reverse arbitrage and internal - external positive arbitrage opportunities [170]. - Rhythm and Risk: Before the long - term mine - smelting order is finalized, the zinc price is still likely to rise. After April, the zinc price may be under pressure. There is a possibility of the market pre - trading the long - term shortage expectation of zinc elements. Risks include the progress of Huoshaoyun's production, tariff risks, domestic and overseas demand uncertainties [172].

Group 1 - International oil prices have seen an expanded decline, contributing to a bearish sentiment in global stock markets, which has pressured zinc prices [1] - Overnight, London zinc prices fell for the third consecutive day, closing at $3035 per ton, down $60 or 1.94%, with trading volume increasing by 5810 contracts [1] - Domestic zinc concentrate production in November was 311,400 tons, a decrease of 19,400 tons from October, indicating a tightening supply due to seasonal production cuts [2] Group 2 - The processing fees for domestic zinc ore have rapidly decreased, with domestic processing fees dropping to 1600 yuan per metal ton, and imported ore processing fees falling to $50.56 per dry ton [2] - As of the end of November, smelter raw material inventories have decreased to 377,000 metal tons, with available days of inventory dropping to 20.8 days, indicating a tightening supply situation [2] - Domestic zinc ingot inventories have continued to decline, with a weekly decrease of 12.34%, reaching the lowest level in three and a half months, suggesting strengthened support for zinc prices [2]

Report Summary 1. Report Industry Investment Rating - Not provided in the content 2. Core View of the Report - Domestic inventory de - stocking trend remains unchanged. Short - term consumption resilience limits the depth of zinc price correction, and there is a possibility of re - inflation in the long - term under the interest rate cut cycle [1][5] 3. Summary by Relevant Catalogs Important Data - **Spot**: LME zinc spot premium is -$21.57 per ton. SMM Shanghai zinc spot price is 23,130 yuan/ton, up 110 yuan/ton from the previous trading day, with a premium of 110 yuan/ton; SMM Guangdong zinc spot price is 23,020 yuan/ton, up 90 yuan/ton, with a premium of - 15 yuan/ton; Tianjin zinc spot price is 23,030 yuan/ton, up 90 yuan/ton, with a premium of 10 yuan/ton [2] - **Futures**: On December 18, 2025, the main SHFE zinc contract opened at 23,000 yuan/ton, closed at 23,030 yuan/ton, up 120 yuan/ton from the previous trading day. The trading volume was 92,275 lots, and the open interest was 52,902 lots. The highest price was 23,105 yuan/ton, and the lowest was 22,965 yuan/ton [3] - **Inventory**: As of December 18, 2025, the total inventory of zinc ingots in seven regions monitored by SMM was 122,200 tons, a decrease of 3,500 tons from the previous period. LME zinc inventory was 99,400 tons, an increase of 1,700 tons from the previous trading day [4] Market Analysis - Downstream rigid - demand procurement continues to repair the spot premium. Domestic consumption shows resilience, and social inventory is declining. Overseas inventory has increased sharply, and the premium has turned into a discount. The export window for Chinese zinc ingots has closed, but the concentrated delivery is not expected to last, and the absolute inventory level is still low. The TC of zinc mines continues to decline. High - altitude areas in China have started to reduce production, resulting in a decrease in domestic ore supply. However, smelters' procurement demand and enthusiasm remain high, and the TC of zinc mines is expected to decline slightly. The comprehensive smelting losses of smelters have expanded, and the supply in December may still be lower than expected, with a significant decrease in supply pressure compared to the previous period [5] Strategy - **Single - side**: Cautiously bullish - **Arbitrage**: Inter - period positive spread arbitrage [6]

Group 1 - The domestic zinc futures market is experiencing a downward trend, with the main contract for zinc opening at 23,310.00 CNY/ton and showing a decline of approximately 1.82% [1] - Various institutions have provided insights on the future of zinc prices, indicating that the macroeconomic environment remains loose due to the Federal Reserve's dovish signals, which may continue into 2026 [2] - Zinc ore shortages are leading to a continuous decline in domestic zinc concentrate processing fees, while the overall pricing for imported zinc concentrates is also trending downward [2] Group 2 - The production of refined zinc is expected to decrease due to companies actively reducing output in response to raw material and profit issues, with a reported decline of 12,100 tons in social inventory last week [3] - The demand side is weakening, particularly in the real estate sector, which is negatively impacting overall consumption, while the automotive sector is the only area expected to show growth [2][3] - The current market sentiment for non-ferrous metals is declining, and zinc prices may retract some gains as the market adjusts to the anticipated oversupply in the coming year [3]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report In October, zinc prices declined and then rebounded. The industry's focus was on the short squeeze of LME zinc and domestic zinc smelting production cuts. The registered warehouse receipts of LME zinc ingots reached a new low in recent years, and the high LME zinc spread opened the domestic zinc ingot export window. With the decrease in imported zinc ore and the increase in domestic zinc smelting winter stockpiling demand, the zinc ore TC declined, and the zinc smelting profit decreased, leading to a slowdown in zinc ingot supply growth. The downstream demand remained generally stable, and the total domestic zinc ingot inventory gradually increased. The major short positions in the previous main contract of SHFE zinc significantly reduced, and some turned into net long positions. The registered warehouse receipts of LME zinc slightly increased, alleviating the overseas structural risk. Considering the recent macro - events and the positive sentiment in the commodity market, SHFE zinc is expected to be strong in the short term, but the upside space for zinc prices is limited during the surplus cycle [11]. 3. Summary by Directory 3.1 Monthly Assessment - **Price Review**: In October, zinc prices declined and then rebounded. The LME zinc registered warehouse receipts hit a new low of 22,900 tons in recent years, and the high LME zinc spread opened the domestic zinc ingot export window. As of November 6, the SHFE zinc index rose 0.10% to 22,691 yuan/ton, with a total unilateral trading position of 225,700 lots. The LME zinc 3S fell 16 to $3,054.5/ton, with a total position of 228,600 lots. The average price of SMM 0 zinc ingot was 22,500 yuan/ton [11]. - **Domestic Structure**: The domestic social inventory slightly decreased to 158,700 tons, and the SHFE zinc futures inventory was 68,000 tons. The basis in Shanghai was - 55 yuan/ton, and the spread between the continuous contract and the first - month contract was - 45 yuan/ton. The LME zinc inventory was 34,000 tons, and the cancelled warehouse receipts were 4,300 tons. The basis of the cash - 3S contract was $98.23/ton, and the 3 - 15 spread was $53.2/ton. The ex - exchange rate SHFE - LME ratio was 1.046, and the zinc ingot import loss was 4,211.76 yuan/ton [11]. - **Industry Data**: The domestic TC of zinc concentrate was 2,850 yuan/metal ton, and the imported TC index was 103 dollars/dry ton. The port inventory of zinc concentrate was 248,000 physical tons, and the factory inventory was 616,000 physical tons. The weekly operating rates of galvanized structural parts, die - cast zinc alloys, and zinc oxide were 57.54%, 52.50%, and 58.19% respectively [11]. - **Outlook**: The domestic zinc ore inventory continued to decline, the zinc concentrate processing fee dropped again, and the domestic zinc smelting profit decreased, resulting in a decline in monthly zinc ingot production. With downstream demand remaining stable, the total domestic zinc ingot inventory slowly increased. SHFE zinc is expected to be strong in the short term, but the upside space is limited [11]. 3.2 Macro Analysis The report presents multiple charts related to the US fiscal and debt situation, the Fed's balance sheet, dollar liquidity, manufacturing PMIs of China and the US, and manufacturing new and unfinished orders in the US, but no specific analysis conclusions are provided [14][16][19][20]. 3.3 Supply Analysis - **Zinc Ore Supply**: In September 2025, the domestic zinc ore production was 314,500 metal tons, a year - on - year decrease of 10.0% and a month - on - month decrease of 8.8%. From January to September, the cumulative zinc ore production was 2,739,800 metal tons, a cumulative year - on - year decrease of 3.5%. The net import of zinc ore in September was 505,400 dry tons, a year - on - year increase of 25.2% and a month - on - month increase of 8.6%. From January to September, the cumulative net import of zinc ore was 4,000,600 dry tons, a cumulative year - on - year increase of 41.0%. The total domestic zinc ore supply in September was 541,900 metal tons, a year - on - year increase of 2.0% and a month - on - month decrease of 2.2%. From January to September, the cumulative domestic zinc ore supply was 4,540,100 metal tons, a cumulative year - on - year increase of 10.3% [25][27]. - **Zinc Ingot Supply**: In October 2025, the zinc ingot production was 617,200 tons, a year - on - year increase of 21.4% and a month - on - month increase of 2.8%. From January to October, the cumulative zinc ingot production was 5,686,300 tons, a cumulative year - on - year increase of 10.1%. The net import of zinc ingot in September was 23,300 tons, a year - on - year decrease of 58.1% and a month - on - month decrease of 16.2%. From January to September, the cumulative net import of zinc ingot was 267,700 tons, a cumulative year - on - year decrease of 21.1%. The total domestic zinc ingot supply in September was 623,400 tons, a year - on - year increase of 12.3% and a month - on - month decrease of 4.7%. From January to September, the cumulative domestic zinc ingot supply was 5,336,800 tons, a cumulative year - on - year increase of 6.8% [33][35]. 3.4 Demand Analysis - **Initial - stage Demand**: The weekly operating rates of galvanized structural parts, die - cast zinc alloys, and zinc oxide were 57.48%, 53.13%, and 56.36% respectively. The raw material inventories were 13,000 tons, 13,000 tons, and 3,000 tons respectively, and the finished product inventories were 370,000 tons, 10,000 tons, and 5,000 tons respectively [39]. - **Apparent Demand**: In September 2025, the domestic zinc ingot apparent demand was 622,900 tons, a year - on - year increase of 8.9% and a month - on - month increase of 3.9%. From January to September, the cumulative domestic zinc ingot apparent demand was 5,193,600 tons, a cumulative year - on - year increase of 4.7% [41]. 3.5 Supply - Demand and Inventory - **Domestic Balance**: In September 2025, the domestic zinc ingot supply - demand difference was a surplus of 500 tons. From January to September, the cumulative domestic zinc ingot supply - demand difference was a surplus of 143,200 tons [52]. - **Overseas Balance**: In July 2025, the overseas refined zinc supply - demand difference was a surplus of 3,000 tons. From January to July, the cumulative overseas refined zinc supply - demand difference was a surplus of 28,200 tons [55]. 3.6 Price Outlook - **Domestic Structure**: The domestic social inventory slightly decreased to 161,500 tons. The SHFE zinc futures inventory was 67,800 tons. The basis in Shanghai was - 30 yuan/ton, and the spread between the continuous contract and the first - month contract was - 5 yuan/ton [60]. - **Overseas Structure**: The LME zinc inventory was 34,900 tons, and the cancelled warehouse receipts were 6,100 tons. The basis of the cash - 3S contract was $96.02/ton, and the 3 - 15 spread was $46.49/ton [63]. - **Cross - market Structure**: The ex - exchange rate SHFE - LME ratio was 1.04, and the zinc ingot import loss was 4,272.74 yuan/ton [64]. - **Position Analysis**: The net position of the top 20 holders of SHFE zinc turned net long, the net long position of LME zinc investment funds increased, and the net short position of commercial enterprises decreased, indicating a short - term bullish sentiment from the position perspective [67].