1. Report Industry Investment Ratings No specific industry investment ratings are provided in the report. 2. Core Views of the Report - The A - share market is in a state of continuous volume contraction and low volatility, with pro - cyclical sectors showing a structural upward trend. For different futures products, there are various trends and influencing factors, including macro - economic data, policy expectations, and supply - demand fundamentals [2][3][4]. - The bond market has a fragile trading sentiment, with ultra - long bonds leading the decline. The market is affected by expectations of monetary and fiscal policies, as well as institutional behaviors [5][6][7]. - The precious metals market lacks clear direction due to a dull macro - news background. Gold is oscillating at a high level, while silver is in a corrective phase [8][9][11]. - The shipping index of container transportation to Europe is expected to show a short - term oscillating pattern, with the spot market stabilizing and the peak - season expectation slightly recovering [12]. - In the non - ferrous metals sector, different metals have different market situations. For example, copper prices are strongly supported, while alumina is expected to have limited short - term decline space [17][19]. - In the black metals sector, steel mills are reducing production, and the iron ore market is expected to oscillate. Coke and coking coal markets are facing supply - demand imbalances and price fluctuations [49][52][60]. - In the agricultural products sector, different products have different outlooks. For example, the soybean meal market is waiting for the USDA report, and the pig market is in a tug - of - war between upstream and downstream [64][66]. - In the energy and chemical sector, different products such as PX, PTA, and short - fibers have different supply - demand relationships and price trends [82][84][86]. 3. Summaries by Relevant Catalogs Financial Derivatives - Financial Futures Stock Index Futures - Market situation: A - share major indices were narrowly oscillating. The CSI 300, SSE 50, etc. rose, while the Shanghai Composite Index slightly declined. The four major stock index futures contracts also rose [2][3]. - News: Domestically, the market regulatory authority issued a standard for take - out platform services. Overseas, the Bank of Japan officials made statements about monetary policy [3][4]. - Capital flow: A - share trading volume decreased by over 100 billion yuan, and the central bank had a net cash withdrawal of 175.6 billion yuan [4]. - Operation suggestion: Be cautious and wait and see in the short term. Consider a bull spread of put options on the CSI 1000 when there are pull - backs [4]. Treasury Futures - Market performance: Treasury futures closed down across the board, with the 30 - year contract leading the decline. Bond yields generally rose [5][6]. - Capital flow: The central bank had a net cash withdrawal of 175.6 billion yuan, and the inter - bank market liquidity remained loose [6]. - Operation suggestion: Temporarily wait and see. Pay attention to the Politburo meeting and the new regulations on bond fund redemption fees. Consider participating in varieties within 10 - year if the market sentiment improves. The curve strategy may tend to steepen [7]. Financial Derivatives - Precious Metals - Market review: As of the week of November 29, US employment data showed a pattern of low lay - offs and low recruitment. Gold oscillated at a high level, while silver corrected. Platinum and palladium also declined [8][9]. - Outlook: Gold may face resistance at high levels, and short - term trading can consider selling out - of - the - money put options. Silver may see a strong short - term price trend, but attention should be paid to the improvement of scrap aluminum supply and inventory reduction. Platinum is expected to oscillate upward in the medium - to - long term [11]. Financial Derivatives - Container Shipping Index to Europe - Index: As of December 1, the SCFIS European line index and the SCFI composite index declined [12]. - Fundamentals: The global container shipping capacity increased year - on - year, and the demand in the eurozone and the US showed different situations [12]. - Logic: The futures market oscillated, and the spot market stabilized. It is expected to show a short - term oscillating pattern [12]. Commodity Futures - Non - Ferrous Metals Copper - Spot: Copper prices rose, and the discount of electrolytic copper increased. The overall trading was poor [13]. - Macro: The US manufacturing PMI was in a contraction range, and the ADP employment data was lower than expected, increasing the expectation of Fed rate cuts [13]. - Supply: The spot TC of copper concentrate was at a low level, and the 2026 long - term premium proposed by Codelco was significantly higher. The production of electrolytic copper in November increased [14][15]. - Demand: The weekly operating rates of copper rod processing decreased, but the downstream demand showed strong resilience [16]. - Inventory: LME and COMEX copper inventories increased, while domestic social inventories decreased [16]. - Logic: With the significant increase in LME cancelled warrants, copper prices are strongly supported. In the long - term, the supply - demand contradiction will support the upward movement of the bottom price [17]. - Operation suggestion: Adopt a strategy of buying on dips, with the main support level at 88,500 - 89,500 [17]. Alumina - Spot: Alumina prices were stable or slightly declined, and the supply pattern was gradually becoming looser [18]. - Supply: In November, the production of metallurgical - grade alumina decreased slightly month - on - month, mainly due to the phased production reduction in the north [18]. - Inventory: Alumina inventories increased [19]. - Logic: The market is in a state of high supply, high inventory, and cost support. It is expected to maintain a bottom - oscillating pattern [19]. - Operation suggestion: The main contract is expected to operate in the range of 2,575 - 2,775 yuan/ton, with limited short - term decline space [19]. Other Non - Ferrous Metals Similar analysis methods are used for other non - ferrous metals such as aluminum, zinc, tin, etc., considering factors such as spot prices, supply - demand relationships, and inventory changes [20][28][33]. Commodity Futures - Black Metals Steel - Spot: Steel prices were stable, and the basis of the main contracts of rebar and hot - rolled coil changed differently [47]. - Cost and profit: The cost of coking coal and coke decreased, and steel mill profits slightly recovered [48]. - Supply: Iron ore production increased slightly year - on - year, and steel production decreased slightly [48]. - Demand: Domestic demand was weak, and exports remained at a high level. The apparent demand in December was expected to decline seasonally [49]. - Inventory: Steel inventories decreased [49]. - View: Steel prices are expected to oscillate in a range. Consider a long - rebar and short - iron - ore arbitrage [49]. Iron Ore - Spot: Iron ore prices declined [50]. - Futures: The main iron ore futures contract declined slightly [50]. - Basis: The basis of different iron ore varieties changed [50]. - Demand: Steel mill production reduction continued, and iron ore demand decreased [51]. - Supply: The global iron ore shipment increased, and the port arrival volume decreased [51]. - Inventory: Port inventories increased, and steel mill inventories decreased [52]. - View: Iron ore futures are expected to oscillate in the range of 750 - 820 [52]. Coking Coal and Coke Similar analysis methods are used for coking coal and coke, considering factors such as spot prices, supply - demand relationships, and inventory changes [54][57]. Commodity Futures - Agricultural Products Soybean Meal - Spot market: Domestic soybean meal prices were stable or slightly declined, and trading volume decreased [61]. - Fundamental news: Analysts expected changes in US soybean export sales, and the soybean sowing progress in Brazil was high [61][62]. - Market outlook: The soybean meal market is expected to oscillate, and attention should be paid to domestic soybean procurement [64]. Other Agricultural Products Similar analysis methods are used for other agricultural products such as pigs, corn, and sugar, considering factors such as spot prices, supply - demand relationships, and policy impacts [65][67][70]. Commodity Futures - Energy and Chemicals PX - Spot: PX prices continued to correct, and the market trading atmosphere was average [82]. - Profit: PX profit margins changed [82]. - Supply - demand: PX supply may contract in the first quarter, and demand was relatively strong [82]. - Market outlook: PX is expected to oscillate at a high level in the short term [82]. Other Energy and Chemical Products Similar analysis methods are used for other energy and chemical products such as PTA, short - fibers, and ethylene glycol, considering factors such as spot prices, supply - demand relationships, and inventory changes [83][86][89].

Core Viewpoint - The A-share market experienced a collective rise, with the ChiNext Index leading the gains, driven by strong performance in the AI smartphone sector and other active industries [1] Group 1: Market Performance - The Shanghai Composite Index rose by 0.65% [1] - The Shenzhen Component Index increased by 1.25% [1] - The ChiNext Index saw a rise of 1.31% [1] - Over 3,300 stocks in the market experienced an increase [1] - The total trading volume reached approximately 1.89 trillion yuan [1] Group 2: Sector Performance - The non-ferrous metals sector was active, with companies like Luoping Zinc Electric and Minfa Aluminum hitting the daily limit [1] - The consumer electronics sector strengthened, with AI smartphone concepts leading the charge, including stocks like ZTE Corporation and Chaoyang Technology reaching the daily limit [1] - Other sectors with notable gains included commercial aerospace, tourism and hotels, storage chips, and photolithography [1] - The titanium dioxide, insurance, and liquor sectors experienced declines [1]

Report Industry Investment Rating - The report gives a neutral rating for the zinc industry [2] Report's Core Viewpoint - Zinc supply is decreasing while consumption remains stable, and there is still support below the price [2] - Domestic inventory is continuing to decline, and the operating rate of galvanizing has dropped [3] Summary by Relevant Catalogs 1. Market Performance - The closing price of SHFE Zinc main contract last week was 22,425, with a weekly increase of 0.13%; the closing price of the night session yesterday was 22,470, with a night - session increase of 0.20%. The closing price of LmeS - Zinc 3 last week was 3,051, with a weekly increase of 1.97% [6] 2. Industry Chain Vertical and Horizontal Comparison Inventory - Zinc ore, smelter finished products have declined from high levels, and the visible inventory of zinc ingots has decreased [9] Profit - Zinc ore profits are at the forefront of the industry chain, and smelting profits are at a historical median level [11] Operating Rate - The smelting operating rate has decreased, and the downstream operating rate is at a historically low - to - medium level [13] 3. Trading Aspect Spot - The spot premiums in Guangdong and Tianjin have weakened. Overseas premiums have shown differentiation this week, with the Singapore premium remaining stable and LME CASH - 3M strengthening significantly [17][18] Spread - SHFE Zinc maintains a C structure, but there are certain changes in the far - end [20] Inventory - This week, there has been a slight reduction in inventory, and the position - to - inventory ratio has continued to decline. LME inventory is mainly concentrated in Singapore, with a significant increase in total LME inventory, a large decrease in the cancelled warrant ratio to a historical low. The bonded area inventory has decreased slightly this week, and the total global visible zinc inventory has increased slightly [24][30][32] Futures - The domestic long - position volume is at a historical median level for the same period [33] 4. Supply Zinc Concentrate - Zinc concentrate imports have dropped significantly, domestic zinc ore production has increased, the processing fee for imported ore has decreased this week, and the processing fee for domestic ore has been significantly reduced. The arrival volume of ore at the port is at a high level, and the smelter's raw material inventory has decreased [36][37] Refined Zinc - Smelting output has declined and is at a historically high level for the same period. The smelter's finished product inventory has decreased and is at a historically high level for the same period. Zinc alloy production is at a high level [44] 5. Zinc Demand - The consumption growth rate of refined zinc is positive. The monthly downstream operating rate has slightly decreased, mostly at a historically low - to - medium level for the same period. The real estate market remains at a low level, and the power grid shows structural increments [49][52][68] 6. Overseas Factors - The European Continental benchmark Dutch natural gas futures price, the ICE EU carbon quota main contract price, and electricity prices in the UK, Spain, Italy, Germany, and France are presented in the report, along with the profit and loss of zinc smelters in these countries [70][71][73]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - In 2026, there is an expectation of tight supply at the mine end. Overseas mine supply growth is slowing, and domestic mines are affected by depletion. The Huoshaoyun Mine may not contribute significantly to the market due to poor market utilization. TC is unlikely to rise, and the Benchmark may remain below $100/ton, failing to stimulate overseas smelting growth. In China, smelters are also facing comprehensive cost losses. Therefore, with the expected tight supply at the mine end in 2026, the pressure on smelting supply is expected to weaken significantly. - At the beginning of the 14th Five-Year Plan and during the overseas interest rate cut cycle, there are positive expectations for the consumer end. Even if the production of the Huoshaoyun Mine is realized smoothly, the supply and demand will remain balanced in 2026, but there is still a possibility of the invisibility of visible inventory, resulting in a downward trend in social inventory. If the Huoshaoyun Mine fails to be put into production as expected, the supply and demand will be tight. - The report is not pessimistic about the zinc price in 2026 [5]. Summary by Directory I. Zinc Ore - **1.1 Overseas mines are growing as expected, but the supply pressure will significantly decline in 2026** - In Q3 2025, overseas mine production was 1.3 million tons, a year-on-year increase of 126,000 tons; the cumulative production of the sample from January to September was 3.755 million tons, a year-on-year increase of 326,000 tons. The increase mainly comes from new and复产 projects as expected. Kipushi has复产 as scheduled, with improved grade and recovery rate, and its production is expected to increase further. Its production is expected to increase by 60,000 tons year-on-year in 2026. Antamina is one of the main mines contributing to the increase overseas this year, with a year-on-year increase of 172,000 tons in zinc concentrate production from January to September. However, it will shift to copper production from 2026 - 2028, and its production is expected to be lower than in 2025, with a year-on-year decline of 150,000 tons in 2026. The复产 of the Tera Mine is slower than expected, with a production of 60,000 tons in the first three quarters. It is expected to contribute an incremental output of 10,000 - 20,000 tons in 2026. Gamsberg's production has increased significantly due to improved capacity utilization and a higher proportion of high-grade ore, and it is expected to contribute an incremental output of 50,000 tons in the second half of 2026. Grupo Mexico's production has increased due to improved mine grade, but its incremental output in 2026 is expected to be less than 10,000 tons. The OZ Mine is expected to contribute an incremental output of 100,000 tons in 2026. The Red Dog Mine's production has declined due to grade decline, and it is expected to continue to decline by 80,000 - 100,000 tons year-on-year in 2026 [11][12][13]. - It is estimated that the overseas zinc concentrate production will be 8.29 million tons in 2025, a year-on-year increase of 420,000 tons, and is expected to contribute an incremental output of 90,000 tons in 2026 [6]. - For domestic mines, from January to October, the domestic zinc ore production was 3.058 million tons, a year-on-year decrease of 56,000 tons. Due to factors such as depletion of existing domestic mines, the production of old mines in the sample is showing a downward trend. The Huoshaoyun Mine has great uncertainties, and its impact on the market needs to be further observed. In 2025, without considering the Huoshaoyun Mine, the new and复产 capacities will contribute 50,000 tons, but considering the decline in the production of sample mines, the domestic ore supply will increase slightly by 30,000 tons year-on-year. In 2026, the new and复产 projects are expected to contribute an output of about 60,000 tons, and with the use of a small amount of ore sold by the Huoshaoyun Mine for blending, the domestic ore supply is expected to increase by 100,000 tons (excluding the contribution of the Huoshaoyun Mine's self - smelting into zinc ingots). At the same time, attention should be paid to the production decline of old sample mines due to depletion problems [14][15][16]. - From January to October, the import of zinc ore was 4.349 million tons, a cumulative year-on-year increase of 36.6%. Since June, zinc ore imports have been facing continuous losses, and the year-on-year growth rate of monthly zinc ore imports has dropped rapidly [16]. II. Refined Zinc - **2.1 High profit pressure at home and abroad, and the supply pressure will be alleviated quarter-on-quarter** - In China, the supply pressure began to appear in the second half of the year. From June, the daily average output increased significantly month-on-month, and from July, the year-on-year growth rate of monthly output exceeded 20%. The social inventory of zinc ingots began to accumulate rapidly from July, and the domestic spot market quickly changed from a premium structure to a discount structure under high supply pressure. In terms of absolute price, after the price dropped rapidly from a high of over 25,000 yuan/ton to 22,000 yuan/ton in the first half of the year due to supply pressure, in the second half of the year, after the supply pressure was realized, the absolute price fluctuated in the range of 21,500 - 23,000 yuan/ton, mainly supported by the macro - environment. Compared with copper and aluminum prices, the relative price of zinc is still declining [29]. - From January to October, the cumulative output of zinc ingots was 5.686 million tons, a cumulative year-on-year increase of 10.1%. It is estimated that the annual output will be 5.9 million tons, a cumulative year-on-year increase of 11.5%. From January to October, China's cumulative import of refined zinc was 277,000 tons, a cumulative year-on-year decrease of 26.6%. In 2025, China's long - term import order of zinc ingots was about 15,000 - 20,000 tons per month. The import window closed in May, and the pattern of strong overseas and weak domestic markets continued, with the import loss expanding. The export window opened in October. It is expected that China's long - term import order of zinc ingots will significantly decrease in 2026 and may even approach zero, and the export window may open periodically, and China will become a net exporter of zinc ingots, which will effectively relieve the domestic supply pressure [29][30][31]. - Since September, the domestic mine TC has started to decline, and since October, the imported mine TC has also declined synchronously. The smelting losses of domestic smelters have expanded, from a minimum loss of 100 yuan/ton to a loss of 1,300 yuan/ton. Even with the continuous increase in the sulfuric acid price, the industry is currently at the break - even point, and high - cost areas are facing comprehensive cost losses. The daily average output of the supply side has dropped from a high of 20,200 tons to 19,900 tons. Although the overseas mine production is increasing as expected, the TC is showing a downward trend. From the perspective of mine supply, although the supply will still grow in 2026, the worst - expected period has ended. Therefore, considering the smelting profit, the current supply pressure still exists, but it is expected to be alleviated quarter - on - quarter [30][31]. - Overseas supply problems may still not be resolved. It is predicted that the overseas zinc ingot output will be 6.836 million tons in 2025, a quarter - on - quarter decrease of 1.4%. The European region has contributed to the continuous decline, which is inevitably related to the power cost problem. Since the European energy crisis, the power cost has not returned to the pre - crisis level and is even higher than the domestic electricity price. In addition, regions such as Australia and the United States are also facing power cost problems. If the 2026 zinc ore Benchmark pricing does not improve significantly compared to this year, in the long run, the overseas supply side will not put pressure on the zinc price, and more attention should be paid to the sustainability of consumption [32]. - **2.2 The social inventory accumulation is lower than expected** - In the first half of the year, strong domestic demand and export - driven consumption, combined with the fact that the supply side had not yet released pressure, led to lower - than - expected inventory accumulation during the Spring Festival and inventory depletion to a historical low during the peak season. In the second half of the year, after the supply expectations were realized, the social inventory was originally expected to accumulate to 200,000 tons, but in fact, due to the unexpected growth of domestic demand and the overseas warehouse receipt risk, the export window opened. Since October, although the social inventory is at a historical high for the same period, it has shown a seasonal downward trend. The highest point of the social inventory this year was only 160,000 tons. The reasons for the lower - than - expected inventory accumulation include: consumption structural reform, which made us underestimate the actual consumption as the decline of traditional real estate and infrastructure offset by new consumption; the expansion of the alloying scale of intermediate processed products, resulting in the invisibility of visible inventory; the opening of the export window, which enabled traders and smelters to open up overseas sales channels. If the domestic supply side is compressed due to cost problems in the future, the inventory depletion rhythm is expected to accelerate, which will be a positive factor for the zinc price [53][54][56]. - The LME inventory has dropped from 230,000 tons at the beginning of the year to a minimum of 35,000 tons, and there has been a warehouse receipt risk with a rapid increase in the spot premium. Although there has been a slight increase subsequently, the absolute inventory level is still low, and the warehouse receipt risk has not been resolved. On the one hand, there has been an unexpected production cut on the overseas supply side, and on the other hand, consumption has been strong, and overseas tariff trade wars have not affected the actual consumption [56]. III. Downstream Consumption - **3.1 Export drives galvanized consumption** - From January to October, China's cumulative net export of galvanized strips was 11.101 million tons, a cumulative year-on-year increase of 12.4%. The cumulative growth rate of excavator sales reached 17%, which is not in line with the growth rate of China's real estate and infrastructure, and is more due to the infrastructure demand in third - world countries driven by China's development. Therefore, in 2026, exports are expected to maintain a high - growth contribution to commodity consumption and may continue for many years. Considering the export of galvanized strips, angle steels, and automobile tires, it is estimated that exports will drive zinc consumption to increase by 120,000 tons in 2026 [64]. - **3.3 New energy power drives consumption growth** - From January to September, China's photovoltaic installed capacity was 240.4GW, a year-on-year increase of 49.4%. Affected by the policy, the installed capacity was pre - consumed, and the annual installed capacity is expected to be 280 - 290GW, with the year-on-year growth rate dropping to 3 - 5%. In 2026, the preliminary expected installed capacity is about 250GW, a year-on-year decrease of about 10%. Considering the increase in the proportion of centralized photovoltaics driving the demand for galvanizing, it is estimated that the zinc consumption in the photovoltaic sector will be 380,000 tons in 2026, a year-on-year decrease of 40,000 tons. - At the beginning of the 14th Five - Year Plan, there are clear goals for the power grid and new energy power. It is estimated that the cumulative incremental installed capacity in five years can reach 600GW, with an average annual incremental installed capacity of 120GW, and there is a possibility of accelerating the completion at the beginning. From January to October, China's wind power installed capacity was 70GW, and the annual installed capacity is expected to be 104GW, corresponding to a zinc consumption of 310,000 tons, a year-on-year increase of 70,000 tons. In 2026, the expected installed capacity is 120GW, corresponding to a zinc consumption of 360,000 tons, contributing an incremental output of 50,000 tons. - From January to October, China's cumulative investment in power grid construction was 437.8 billion yuan, a cumulative year-on-year increase of 9.9%. In 2026, as the starting year of the 14th Five - Year Plan, UHV projects such as "Xinjiang Power to Sichuan" and "Gansu Power to Zhejiang" will be promoted, and rural power grid upgrading and transformation will be carried out. It is estimated that the average annual compound growth rate of the 14th Five - Year Plan power grid can reach 8%, and there is a possibility of accelerating in the first two years. It is estimated that the power grid towers, transformers, etc. will drive zinc consumption by 50,000 tons [67][68]. - **3.4 Halving of domestic purchase tax, and the growth of automobile output depends on exports** - From January to October, China's cumulative automobile production was 27.692 million vehicles, a cumulative year-on-year increase of 13.2%, among which the cumulative year-on-year increase in new energy vehicle production was 33.1%, and the cumulative year-on-year decrease in traditional vehicle production was 0.1%. The comprehensive data is much better than the initial expectations. It is estimated that the annual cumulative automobile production will be 33.5 million vehicles, a cumulative year-on-year increase of 10.3% (3.22 million vehicles). - In terms of exports, from January to October, China's cumulative automobile export volume was 5.615 million vehicles, a year-on-year increase of 15.7%. According to this data, the annual export is estimated to contribute an incremental output of 1.1 million vehicles. According to customs data, China's cumulative automobile exports (including chassis) were 6.51 million vehicles, a year-on-year increase of 23.3%. According to this data, the annual export is estimated to contribute an incremental output of 1.8 million vehicles. Although this includes second - hand car exports, it can also be seen that automobile exports have made a significant contribution to China's automobile production. In 2026, although the halving of the domestic automobile purchase tax may put pressure on automobile production, under the optimistic export expectations, it is estimated that the automobile production in 2026 can reach 37.2 million vehicles, with a cumulative year-on-year growth rate of 7.8%, corresponding to an increase in zinc consumption of 60,000 - 70,000 tons [73]. - **3.5 Domestic consumption structural reform** - From January to October, China's cumulative infrastructure investment increased by only 1.5% year-on-year, the cumulative year-on-year decline in new real estate construction was 19.8%, the cumulative year-on-year decline in real estate construction was 9.4%, and the cumulative year-on-year decline in real estate completion was 16.9%. The traditional consumption sector has dragged down consumption. However, structural reform brings new hope. In addition to the automobile and power investment sectors mentioned above, attention should also be paid to the investment growth rate of water transportation, which was 9.4% from January to October. - From January to October, China's cumulative air - conditioner production increased by 3% year-on-year, the cumulative year-on-year decline in color TV production was 2.3%, the cumulative year-on-year increase in household refrigerator production was 0.9%, and the cumulative year-on-year increase in household washing machine production was 6.4%. The performance of the home appliance sector was mediocre [81]. Supply - Demand Balance - In 2025, the actual apparent consumption growth rate is estimated to reach 7.1%, and there is a phenomenon of the invisibility of visible inventory into finished product inventories such as zinc alloys, which also indicates that zinc alloy enterprises are expanding production due to consumption growth. After the decline in the absolute price, it is estimated that downstream enterprises will shift from active inventory depletion to active inventory replenishment, and the actual consumption growth rate can reach 4.3%. - For 2026, the actual consumption growth rate is estimated to reach 2.8%, and there is a possibility that the apparent consumption growth rate will be greater than the actual due to continuous inventory replenishment by downstream enterprises. Regarding the supply side's attitude towards the Huoshaoyun Mine, without considering its production contribution, the smelting supply growth rate is expected to be 1.7%, and there will be a domestic supply shortage of 150,000 tons. Even if an optimistic expectation is given to the Huoshaoyun Mine, contributing an incremental output of

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The fundamentals of the zinc market are mixed, with short - term support at the bottom. It is expected that Shanghai zinc will fluctuate at a high level, and attention should be paid to the range of 22,300 - 22,600 yuan/ton [7]. Summary by Directory 1. Week - to - Week Highlights - **Market Review**: This week, the main contract of Shanghai zinc fluctuated and adjusted, with a weekly increase of 0.13% and an amplitude of 1.43%. As of the end of this week, the closing price of the main contract was 22,425 yuan/ton [7]. - **Market Outlook**: - **Macro - level**: The Price Department of the National Development and Reform Commission organized a symposium on the cost determination of disorderly price competition. In October, the profits of industrial enterprises above designated size in China decreased by 5.5% year - on - year, while the manufacturing and power sectors grew rapidly in the first 10 months [7]. - **Fundamentals**: Upstream, the import volume of zinc ore declined, and the loss of importing zinc concentrates in China widened. Domestic smelters started winter raw material reserves and preferred domestic zinc concentrates, leading to a significant drop in processing fees and a contraction in smelter profits. Overseas supply remained tight, and the export window was open. On the demand side, the downstream market was entering the off - season, with the real estate sector dragging down, and the infrastructure and home appliance sectors weakening, while the automotive sector had some bright spots. Downstream buyers purchased on demand at low prices [7]. - **Technical - level**: The position decreased while the price adjusted, and both long and short positions were cautious. Attention should be paid to the support of MA60 [7]. 2. Futures and Spot Markets - **Price Fluctuation**: As of November 28, 2025, the closing price of Shanghai zinc was 22,425 yuan/ton, up 30 yuan/ton (0.13%) from November 21, 2025. As of November 27, 2025, the closing price of LME zinc was 3,022 US dollars/ton, up 18.5 US dollars/ton (0.62%) from November 21, 2025 [10]. - **Net Position of Top 20 in Shanghai Zinc**: As of November 28, 2025, the net position of the top 20 in Shanghai zinc was 8,558 lots, an increase of 1,085 lots from November 21, 2025. The position volume of Shanghai zinc was 188,919 lots, a decrease of 6,325 lots (3.24%) from November 21, 2025 [14]. - **Price Spreads**: As of November 28, 2025, the aluminum - zinc futures spread was 815 yuan/ton, a decrease of 240 yuan/ton from November 21, 2025. The lead - zinc futures spread was 5,335 yuan/ton, an increase of 105 yuan/ton from November 21, 2025 [18]. - **Spot Premiums**: As of November 28, 2025, the spot price of 0 zinc ingots was 22,360 yuan/ton, a decrease of 120 yuan/ton (0.53%) from November 21, 2025. The spot premium was 45 yuan/ton, an increase of 40 yuan/ton from the previous week. As of November 27, 2025, the spread between the near - month and 3 - month LME zinc was 165.44 US dollars/ton, an increase of 30.69 US dollars/ton from November 20, 2025 [24]. - **Inventory**: As of November 27, 2025, the LME refined zinc inventory was 50,800 tons, an increase of 4,725 tons (10.26%) from November 20, 2025. As of November 28, 2025, the Shanghai Futures Exchange refined zinc inventory was 95,916 tons, a decrease of 4,431 tons (4.42%) from the previous week. As of November 27, 2025, the domestic refined zinc social inventory was 140,600 tons, a decrease of 19,000 tons (11.9%) from November 20, 2025 [27]. 3. Industry Situation - **Upstream - Zinc Ore**: In September 2025, the global zinc ore output was 1.0666 million tons, a month - on - month decrease of 2.29% and a year - on - year increase of 6.15%. In October 2025, the import volume of zinc ore concentrates was 340,863.41 tons, a month - on - month decrease of 32.48% and a year - on - year increase of 3.28% [33][34]. - **Supply - End - Global Refined Zinc**: According to WBMS, the global refined zinc market was in short supply. In September 2025, the global refined zinc output was 1.1952 million tons, a year - on - year increase of 85,800 tons (7.73%); the consumption was 1.1749 million tons, a year - on - year increase of 13,900 tons (1.2%); and there was a surplus of 20,300 tons, compared with a deficit of 51,600 tons in the same period last year [35][39]. - **Supply - End - Refined Zinc Production**: In October 2025, the zinc output in China was 665,000 tons, a year - on - year increase of 15.7%. From January to October, the cumulative zinc output was 6.184 million tons, a year - on - year increase of 8.5% [43]. - **Supply - End - Refined Zinc Export**: In October 2025, the import volume of refined zinc was 18,836.76 tons, a year - on - year decrease of 67.39%; the export volume was 8,518.67 tons, a year - on - year increase of 3824.82% [46]. - **Downstream - Galvanized Sheets**: From January to October 2025, the inventory of galvanized sheets (strips) of major domestic enterprises was 919,400 tons, a year - on - year increase of 16.85%. In October 2025, the import volume of galvanized sheets (strips) was 23,800 tons, a year - on - year decrease of 48.74%; the export volume was 328,100 tons, a year - on - year increase of 14.57% [49][50]. - **Downstream - Real Estate**: From January to October 2025, the new housing construction area was 490.6139 million square meters, a year - on - year decrease of 19.87%; the housing completion area was 348.61 million square meters, a year - on - year decrease of 16.31%. The funds in place for real estate development enterprises were 7.885278 trillion yuan, a year - on - year decrease of 9.7%, among which personal mortgage loans were 1.0834 trillion yuan, a year - on - year decrease of 12.8% [55][56]. - **Downstream - Infrastructure**: From January to October 2025, the infrastructure investment increased by 1.51% year - on - year [62]. - **Downstream - Home Appliances**: In October 2025, the refrigerator output was 8.788 million units, a year - on - year decrease of 6%. From January to October, the cumulative refrigerator output was 89.959 million units, a year - on - year increase of 0.9%. In October 2025, the air - conditioner output was 14.204 million units, a year - on - year decrease of 13.5%. From January to October, the cumulative air - conditioner output was 230.344 million units, a year - on - year increase of 3% [64]. - **Downstream - Automobiles**: In October 2025, the sales volume of Chinese automobiles was 3,322,094 units, a year - on - year increase of 8.82%; the output was 3,358,716 units, a year - on - year increase of 12.09% [68].

Group 1: Report Overview - Report Title: Zinc Industry Chain Weekly Report [1] - Analyst: Ji Xianfei (Chief Analyst/Co-Administrative Head), Wang Zongyuan (Contact Person) [1] - Date: November 23, 2025 [1] Group 2: Investment Rating - No investment rating information provided in the report Group 3: Core Viewpoints - Zinc supply and demand are relatively balanced, and prices will fluctuate in the short term [2][5] - The domestic zinc market shows a pattern of small inventory reduction and a decline in galvanizing starts [3] - In the strategy, the internal and external reverse arbitrage has a certain profit - loss ratio, but the driving logic within the year is not strong, and participation should be cautious [5] Group 4: Summary by Directory 1. Market Review - **Price**: The closing price of SHFE zinc last week was 22,395 yuan/ton, with a weekly decline of 0.13%; the night - session closing price was 22,345 yuan/ton, with a decline of 0.22%. The closing price of LmeS - Zinc 3 last week was 2,992 US dollars/ton, with a weekly decline of 0.75% [6] - **Trading Volume and Open Interest**: The trading volume of SHFE zinc last Friday was 74,639 lots, a decrease of 48,993 lots from the previous week; the open interest was 52,299 lots, a decrease of 47,854 lots. The trading volume of LmeS - Zinc 3 was 12,602 lots, a decrease of 14,959 lots; the open interest was 218,189 lots, a decrease of 9,321 lots [6] - **Inventory**: SHFE zinc warehouse receipts increased by 1,144 tons, the total SHFE zinc inventory decreased by 545 tons, the social inventory decreased by 5,200 tons, the LME zinc inventory increased by 8,350 tons, and the bonded area inventory decreased by 200 tons [6] 2. Industry Chain Comparison - **Inventory**: Zinc ore and smelter finished product inventories have declined from high levels, and zinc ingot visible inventories have decreased [8] - **Profit**: Zinc ore profits are at the forefront of the industry chain, and smelting profits are at the historical median [10] - **Start - up Rate**: The zinc smelting start - up rate has declined, and the downstream start - up rate is at a historically low - to - medium level [12] 3. Trading Aspects - **Spot**: The spot premiums in Guangdong and Tianjin have significantly strengthened. Overseas premiums are differentiated, with Singapore's premium remaining stable, and LME CASH - 3M remaining around 120 US dollars [16][17] - **Spread**: SHFE zinc maintains a C - structure, but there are certain changes in the far end [19] - **Inventory**: There has been a small reduction in inventory this week, and the open - interest - to - inventory ratio has continued to decline. LME inventory is mainly concentrated in Singapore, and the total LME inventory has increased [21][25] - **Futures**: The domestic open interest is at the historical median for the same period [28] 4. Supply - **Zinc Concentrate**: Zinc concentrate imports have dropped significantly, domestic zinc ore production has increased, import ore processing fees have decreased this week, and domestic ore processing fees have decreased significantly. The arrival of zinc ore at ports is at a high level, and smelter raw material inventories have decreased [31][32] - **Refined Zinc**: Smelting output has rebounded and is at a high level for the same period in history. Smelter finished product inventories have decreased and are at a high level for the same period in history. Zinc alloy production is at a high level [39] 5. Demand - **Refined Zinc Consumption**: The consumption growth rate of refined zinc is positive [45] - **Downstream**: The monthly start - up rate of downstream industries has slightly declined, mostly at a historically low - to - medium level for the same period [48] - **Terminal**: The real estate market remains at a low level, and the power grid shows structural increments [65] 6. Overseas Factors - **Energy Prices**: The prices of European natural gas, carbon, and electricity have shown certain fluctuations, which have an impact on the profitability of overseas zinc smelters [67][68][69]

Core Points - The company announced that its former controlling shareholder, Luoping Zinc Electric Company, signed a share transfer agreement with Qujing Development Investment Group on May 30, 2025, to transfer 72,427,600 shares, representing 22.396% of the company's total shares [1] - The Luoping People's Government committed to designate a county-level state-owned enterprise to increase capital in the company's wholly-owned subsidiary, Fuzinc Agriculture, by no less than 130 million yuan, ensuring the company holds over 51% of Fuzinc Agriculture post-capital increase [1] - The share transfer was completed on September 26, 2025, with the shares being unrestricted circulating shares, and discussions regarding asset evaluation results and the capital increase entity are ongoing as of November 21, 2025 [1]

1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints - The overall view on the Shanghai zinc futures (ZN2512) is that it will oscillate and weaken. The market shows mixed signals with both positive and negative factors influencing the price movement [2][21]. - The fundamentals indicate a supply shortage in the global zinc market from January to August 2025, which is a positive factor. However, the主力 net - short position and the increase in LME inventory are negative factors [2]. 3. Summary by Relevant Catalogs 3.1 Fundamentals - In August 2025, global zinc plate production was 1.1507 million tons, and consumption was 1.1717 million tons, resulting in a supply shortage of 21,000 tons. From January to August 2025, the production was 9.0885 million tons, and consumption was 9.3698 million tons, with a supply shortage of 281,300 tons. Global zinc ore production in August 2025 was 1.0696 million tons, and from January to August 2025, it was 8.4457 million tons, suggesting a positive outlook for the zinc market [2]. 3.2 Basis - The spot price was 22,580, and the basis was +160, which is a positive signal for the market [2]. 3.3 Inventory - On November 19, LME zinc inventory increased by 1,550 tons to 45,075 tons, while SHFE zinc inventory warehouse receipts decreased by 1,473 tons to 75,314 tons, presenting a neutral situation [2]. 3.4 Market Trends - On November 19, the Shanghai zinc futures showed an oscillating rebound trend, closing below the 20 - day moving average, with the 20 - day moving average trending upwards, indicating a neutral market [2]. 3.5 Main Positions - The main players held a net - short position, and the short positions increased, which is a negative factor for the market [2]. 3.6 Futures Market Quotes (November 19) - For the zinc futures contracts, different delivery months had various trading volumes, turnovers, and position changes. For example, the contract 2512 had a trading volume of 91,247 lots, a turnover of 10.2260961 billion yuan, and an open interest of 67,487 lots with a decrease of 14,839 lots [3]. 3.7 Spot Market Quotes (November 19) - The price of zinc concentrate's domestic comprehensive TC was 2,600 yuan/metal ton, and the imported comprehensive TC was 90 dollars/dry ton (down 10 dollars/dry ton). The price of 0 zinc in different regions such as Guangdong, Tianjin, and Zhejiang had different ranges and price increases [4]. 3.8 Zinc Ingot Inventory Statistics (November 6 - 17) - The total inventory of zinc ingots in major domestic markets fluctuated slightly during this period. Compared with November 10, the total inventory increased by 40,000 tons, and compared with November 13, it increased by 130,000 tons [5]. 3.9 Zinc Warehouse Receipt Report (November 19) - The total SHFE zinc warehouse receipts were 75,314 tons, a decrease of 1,473 tons compared to the previous day. Different warehouses in Shanghai, Guangdong, Jiangsu, Zhejiang, and Tianjin had various changes in warehouse receipts [7][8]. 3.10 LME Zinc Inventory Distribution (November 19) - The total LME zinc inventory was 45,075 tons, an increase of 1,550 tons compared to the previous day. Different locations had different inventory changes and注销仓单注销占比 [10]. 3.11 Zinc Concentrate Price Summary (November 19) - Zinc concentrate prices in major domestic cities increased by 80 yuan/ton, and the prices in different regions such as Jiyuan, Kunming, and Hechi were in the range of 18,000 - 18,500 yuan/ton [12]. 3.12 Zinc Ingot Smelter Price Quotes (November 19) - The prices of 0 zinc ingots from different smelters such as Hunan Zhuzhou Smelting, Sanmenxia, and Guangdong Zhongjin Lingnan all increased by 100 yuan/ton [15]. 3.13 Domestic Refined Zinc Production in October 2025 - The actual refined zinc production in October 2025 was 524,300 tons, with a month - on - month increase of 4.87% and a year - on - year increase of 18.38%. The planned production for November was 522,300 tons [17]. 3.14 Zinc Concentrate Processing Fee Quotes (November 19) - Domestic zinc concentrate processing fees for different regions with a 50% grade were generally stable, while the imported processing fee for 48% grade decreased by 10 dollars/ton to 90 dollars/ton [19]. 3.15 SHFE Member Zinc Trading and Position Ranking (November 19) - For the zn2512 contract, different futures companies had different trading volumes, long positions, and short positions, and most of them had changes compared to the previous trading day. The total trading volume was 148,344 lots (a decrease of 1,097 lots), the total long positions were 45,287 lots (a decrease of 9,864 lots), and the total short positions were 48,097 lots (a decrease of 9,443 lots) [20].

Report Industry Investment Rating - Unilateral: Cautiously bullish. Arbitrage: Neutral [5] Core View - The support for Shanghai zinc is clear. The TC of domestic and overseas zinc mines has decreased, squeezing the smelting profit, suppressing smelting enthusiasm, and reducing supply - side pressure. Overseas warehouse - receipt inventory is low with risks, and domestic inventory is falling, with micro - data turning from bearish to bullish under a positive macro - background [1][4] Key Points by Content Important Data - **Spot**: LME zinc spot premium is $117.04/ton. SMM Shanghai zinc spot price is 22,610 yuan/ton, down 50 yuan/ton from the previous trading day, with a premium of - 45 yuan/ton. SMM Guangdong zinc spot price is 22,580 yuan/ton, down 50 yuan/ton, with a premium of - 75 yuan/ton. Tianjin zinc spot price is 22,570 yuan/ton, down 50 yuan/ton, with a premium of - 85 yuan/ton [1] - **Futures**: On November 12, 2025, the Shanghai zinc main contract opened at 22,565 yuan/ton and closed at 22,680 yuan/ton, down 40 yuan/ton from the previous trading day. The trading volume was 71,426 lots, and the position was 105,905 lots. The highest price was 22,695 yuan/ton, and the lowest was 22,565 yuan/ton [2] - **Inventory**: As of November 12, 2025, the total inventory of SMM's seven - region zinc ingots was 159,600 tons, up 900 tons from the previous period. The LME zinc inventory was 35,875 tons, up 575 tons from the previous trading day [3] Market Analysis - In November, domestic and overseas zinc mine TC decreased significantly. The smelting comprehensive profit has been compressed from about 1,400 yuan/ton to about 300 yuan/ton, and high - cost areas are facing losses, which will suppress smelting enthusiasm and reduce supply - side pressure. Overseas warehouse - receipt inventory is low with risks, and domestic inventory is falling [4] Strategy - Unilateral: Cautiously bullish. Arbitrage: Neutral [5]

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]