Group 1: Report Industry Investment Rating - No relevant information provided Group 2: Core Viewpoints - Macro: On July 27, local time, US President Trump announced that the US had reached a trade agreement with the EU, imposing a 15% tariff on EU goods exported to the US. The EU will increase investment in the US by $600 billion, purchase US military equipment, and buy US energy products worth $750 billion [5]. - Fundamental: Last week, zinc prices fluctuated and consolidated. The overall sentiment in the commodity market was volatile, and prices dropped significantly on Friday night, showing signs of a potential peak. The fundamentals of zinc have changed little recently, and anti - involution has limited impact on the zinc supply - demand pattern. It is advisable to consider short - selling opportunities at high prices. The supply of zinc ore is becoming more abundant cyclically, with several major zinc mine projects at home and abroad planning to increase production in 2025. The increase in global zinc ore production has led to a continuous strengthening of the spot TC for zinc ore. The increase in ore supply is being transmitted to the smelting end. With the improvement of smelting profits, domestic smelters have increased their operating rates, postponed maintenance, and the output of refined zinc has marginally recovered. It is expected that the production increase trend in the ore and smelting sectors will continue. On the demand side, trade disputes may drag down the global economic growth rate, and there are concerns about a contraction in the total zinc demand. Even if countries quickly reach new trade agreements and the global economic growth rate remains resilient, there is little expectation of an increase in total zinc demand, with demand expected to remain stable. Whether a more optimistic or pessimistic view is taken on demand, the zinc supply - demand balance tends to be in surplus, putting downward pressure on the long - term zinc price [5]. - Strategy: In the short - to medium - term, zinc prices have been fluctuating and consolidating after rising due to commodity market sentiment. Anti - involution has limited impact on the medium - to long - term fundamental pattern of zinc. The zinc market is expected to be in surplus this year. It is recommended to consider short - selling at high prices after the sentiment in the domestic commodity market stabilizes [5]. Group 3: Industry Fundamental - Supply Side 2.1 Zinc Concentrate Production - In May 2025, the global zinc concentrate production was 1.0193 million tons, a year - on - year increase of 2.49%. The international long - term contract TC price for zinc ore in 2025 was set at $80/ton, the lowest in history, and was halved compared to the previous year. High - cost overseas smelters may face operational pressure. However, the long - term contract TC in 2024 was severely overestimated, and the trend of a marginal increase in zinc ore supply remains unchanged [6]. 2.2 Zinc Concentrate Imports and Processing Fees - From January to June 2025, China's cumulative imports of zinc concentrate reached 2.5353 million physical tons, a year - on - year increase of 48.14%. The increase in imports has pushed up processing fees. As of July 25, according to SMM, the processing fee for imported ore was reported at $76.25/ton, and the processing fee for domestic ore was reported at 3,800 yuan/ton. Both domestic and imported ore processing fees have been raised several times recently [9]. 2.3 Smelter Profit Estimation - With the continuous increase in processing fees, smelter profits have been continuously improved [12]. 2.4 Refined Zinc Production - According to ILZSG, in May 2025, the global refined zinc output was 1.1164 million tons, a year - on - year decrease of 4.18%. In June 2025, China's refined zinc production was 580,000 tons, a year - on - year increase of 6.8%. As profits recover, production is gradually increasing [16]. 2.5 Refined Zinc Import Profit and Import Volume - From January to June 2025, China's cumulative net imports of refined zinc were 180,000 tons. The import window for refined zinc is currently closed [18]. Group 4: Industry Fundamental - Consumption Side 3.1 Refined Zinc Initial - Stage Consumption - In May 2025, China's galvanized sheet production was 2.34 million tons, a year - on - year increase of 2.63%. The apparent consumption of galvanized products was relatively sluggish, indicating weak actual demand and active destocking of hidden inventories in the industrial chain [23]. 3.2 Refined Zinc Terminal Consumption - From January to June 2025, the cumulative year - on - year growth rate of infrastructure investment completion (excluding electricity) declined. The back - end of the real estate market improved month - on - month, but front - end indicators such as new construction starts and construction were still weak [25]. 3.3 Refined Zinc Terminal Consumption - In June 2025, China's automobile production was 2.7941 million vehicles, a year - on - year increase of 11.43%. In some regions, national subsidy funds were exhausted, and the production and sales of household appliances cooled down. Attention should be paid to the impact of subsequent tariffs [28]. Group 5: Other Indicators 4.1 Inventory - During the off - season, social inventories of zinc have been continuously increasing [30]. 4.2 Spot Premium/Discount - As of July 25, the LME 0 - 3 premium/discount for zinc was reported at a discount of $1.96/ton. With the arrival of the off - season, the domestic spot premium has declined [33]. 4.3 Exchange Positions - As of July 18, the net long position of LME zinc investment funds was 21,052 lots. The weighted open interest of SHFE zinc has recently declined [36].

Report Industry Investment Rating - No industry investment rating is provided in the report. Core Viewpoints - This week, zinc prices showed weak performance, influenced by the fading anti - price - cutting sentiment, and returned to the pre - anti - price - cutting sentiment trading range. In the short term, due to the fading anti - low - price competition sentiment, zinc prices will experience weak fluctuations, and overall, it is advisable to sell on rallies. The overall view is that zinc prices will mainly fluctuate [4]. Summary by Relevant Catalogs 1. Market Review - Zinc prices were weak this week, with the Shanghai Zinc main contract closing at 22,320 yuan per ton, down 2.85%; LME zinc closed at 2,727 dollars per ton, down 4.72%. Domestic seven - location zinc ingot inventory reached 103,200 tons, still at a low level in recent years; LME zinc inventory decreased to 100,825 tons. This week, 68,700 tons of zinc concentrates arrived at the port [2][4]. 2. Industrial Performance - Nexa announced that the first phase of its Cerro Pasco integration project has completed key milestones. The second phase is progressing as planned, which is expected to extend the lifespan of two mines by over ten years and increase profit margins. The procurement and installation of the fourth tailings filter at Aripuanã are expected to be completed in the second half of 2025, and full - scale production is expected to start in the first half of 2026. In Q2 2025, the company's zinc concentrate production reached 74,000 metal tons, a 9% increase quarter - on - quarter and a 12% decrease year - on - year. In the second quarter, the total sales volume of refined zinc and zinc oxide reached 145,000 tons, a 12% increase from the previous quarter, and the total output was 139,000 tons, a 5% increase quarter - on - quarter and a 9% decrease year - on - year, in line with the annual sales guidance of 560,000 - 590,000 tons [3]. 3. Core Logic - **Supply Side**: There were no significant changes in the supply side this week. In the mining sector, zinc ore imports declined in June, but domestic zinc ore supply remained strong both year - on - year and month - on - month. In the smelting sector, the smelter's operating rate remained strong, with a strong willingness to resume production. The treatment charge (TC) continued to rise, and profit recovery was stable [4]. - **Demand Side**: The downstream operating rate mainly decreased week - on - week, affected by the off - season of consumption and the high zinc prices at the beginning of the week, showing a weak performance [4]. - **Inventory**: Affected by high zinc prices, domestic inventory increased and has now exceeded 100,000 tons, showing a short - term upward trend in a volatile manner. Meanwhile, LME zinc inventory is at a low level in recent years, providing support for the downside of zinc prices [4]. 4. Zinc Futures and Spot Data - **Futures Data**: The Shanghai Zinc main contract had a closing price of 22,320 yuan per ton, a trading volume of 105,121 lots, and an open interest of 108,084 lots. LME zinc had a closing price of 2,727 dollars per ton, with an open interest of 282,405.52 lots [4]. - **Spot Data**: The price of 0 zinc ingot was 22,300 yuan per ton, down 2.06%; the price of 1 zinc ingot was 22,230 yuan per ton, down 2.07%. There were also data on various locations' zinc ingot premiums and discounts and LME zinc premiums and discounts [15]. 5. Zinc Inventory Data - **Domestic Inventory**: Shanghai inventory was 38,000 tons, up 2.43%; Tianjin inventory was 40,100 tons, down 4.52%; seven - location inventory was 103,200 tons, down 0.48%; zinc concentrate port inventory was 263,000 tons, down 4.36%; Shanghai Zinc delivery warehouse inventory was 61,724 tons, up 3.88% [25]. - **LME Inventory**: Total LME zinc inventory was 100,825 tons, down 12.91%; registered LME zinc warrants were 57,075 tons, down 6.40% [25]. 6. Zinc Element Supply - Demand Balance - In June 2025, the supply - demand balance of zinc concentrates was - 2,000 metal tons, a 96.5% decrease year - on - year and a 103.85% decrease month - on - month; the supply - demand balance of refined zinc was 24,000 tons, a 2500.00% decrease year - on - year and a 211.11% decrease month - on - month [41]. 7. Downstream Consumption - The downstream operating rates of galvanizing, zinc oxide, and die - casting zinc alloys were 56.77% (down 2.65 percentage points), 56.13% (up 0.14 percentage points), and 48.24% (down 2.79 percentage points) respectively [44].

Report Summary 1) Report Industry Investment Rating No information provided. 2) Core View of the Report In early 2016, the zinc industry cycle was characterized by tight zinc ore supply and loose zinc ingot supply, with strong expectations but weak reality. The introduction of supply - side reform policies coordinated with the industry cycle, leading to a significant bull market in zinc prices. Currently, the zinc industry is in a situation of loose supply of both zinc ore and zinc ingot, with weak expectations and reality. Although policies such as anti - involution, elimination of backward production capacity, and stable growth have been introduced, the zinc industry cycle fails to resonate with domestic macro - policies, making it difficult for zinc prices to show a sustained upward trend. With the expected increase in zinc ingot supply, if speculative sentiment cools down and the macro - environment weakens, zinc prices still face significant downward risks [1][26]. 3) Summary by Relevant Catalogs Supply Side: Loose Supply of Both Ore and Ingot - **Zinc Ore**: In the first half of the year, the increase in zinc ore supply mainly occurred overseas. From January to June in China, the cumulative year - on - year growth of net zinc ore imports was 48%, driving the cumulative year - on - year growth of total zinc ore supply to 13.5%. The significant growth in zinc ore supply is reflected in higher inventories than in previous years and rising processing fees. The current port inventory of zinc concentrates is 275,000 physical tons, and the factory inventory is 599,000 physical tons, with the total inventory increasing by 286,800 physical tons compared to the visible inventory of the same period last year. The current average domestic TC of zinc concentrates is 3,800 yuan/metal ton, and the import TC index is 76 dollars/dry ton, increasing by 2,350 yuan/metal ton and 115 dollars/dry ton respectively compared to the low points of the same period last year [4]. - **Zinc Ingot**: The increase in zinc ingot supply lags behind that of zinc ore by about 4 months. China's smelting output began to rise in June. In June, the zinc ingot output was 585,100 tons, with a year - on - year change of 7.2% and a month - on - month change of 6.5%. With abundant raw materials, it is expected that the average monthly total supply of domestic zinc ingots will remain above 600,000 tons in the second half of the year. Due to relatively limited downstream demand, the visible inventory of domestic zinc ingots has been rising since early June. From June to July, the total inventory of domestic zinc ingots increased by 24,500 tons to 196,300 tons, and the basis and monthly spread of SHFE zinc also declined significantly [4]. Demand Side: Weak Reality with Marginally Strengthening Expectations - **Current Demand Situation**: The operating conditions of primary enterprises are worse than in previous years. The weekly operating rate of galvanized coils is 3% lower than the same period last year, and that of die - cast zinc alloy enterprises is 4.6% lower. However, some primary enterprises carried out strategic stockpiling as zinc prices declined. The sharp drop in zinc prices in the first half of 2025 brought forward the apparent demand for zinc ingots, and Trump's tariff policy brought forward galvanized exports. These early stockpiling/consumption behaviors may lead to weaker actual consumption in the second half of 2025 compared to the same period of previous years [12]. - **Demand Expectations**: The Yarlung Zangbo River downstream hydropower project started on July 19, with a total investment of 1.2 trillion yuan. As a large - scale infrastructure project, it has increased the consumption expectation of zinc ingots to some extent. Zinc used in hydropower station construction is mainly for the anti - corrosion of metal structural parts. However, due to the long expected construction period of the project, the actual annual demand for zinc ingots is relatively limited, and it mainly has a boosting effect on market sentiment [12]. Market Sentiment and Capital Disturbance - **Overseas**: The Trump administration's influence on the Fed's monetary policy is increasing, raising the market's expectation of a loose Fed monetary policy, which provides some support for zinc prices. As the end - of - month Fed interest rate meeting approaches, the market is waiting for the Fed's interest rate decision [17]. - **Domestic**: On July 18, the Ministry of Industry and Information Technology released a work plan for stable growth and elimination of backward production capacity. Coupled with the anti - involution policy, it has ignited a bull market in domestic bulk commodities. Polysilicon, coking coal, and other black - series commodities have all risen significantly. SHFE zinc, as a non - ferrous metal variety highly correlated with black - series commodities, has also been affected by market sentiment to some extent. After the July delivery in the domestic zinc market, the registered warehouse receipts of zinc ingots on the SHFE returned to over 10,000 tons, the monthly spread of SHFE zinc declined significantly, and the domestic structural risk decreased significantly. Since early July, the concentration of long positions in the LME zinc market has been relatively high. On July 21, the cancelled warehouse receipts of LME zinc increased by 38,400 tons, and the cancelled warehouse receipts dropped to a low of 58,300 tons, pushing the LME zinc monthly structure to strengthen continuously, and the overseas structural risk remains high. Under the pattern of weak domestic and strong overseas markets, the SHFE - LME ratio has continued to decline, and the zinc ingot import window has closed [17]. Comparison of Current and 2016 Market Conditions In 2016, the zinc industry entered a period of zinc ore shortage. According to SMM data, the average profit of zinc ore enterprises entered a loss since the second half of 2015, and in early 2016, the average profit was - 2,300 yuan/metal ton. The zinc ore processing fee was at a high level and showed a marginal weakening trend. Some high - cost zinc mines suffered severe losses. From the end of 2015 to early 2016, Glencore's zinc mines reduced production by 500,000 tons due to heavy losses, and MMG and Vedanta's zinc mines reduced production by 670,000 tons due to resource depletion. In contrast, the current zinc ore market is still in a state of oversupply. The average profit of SMM zinc ore is still 4,300 yuan/metal ton, and the zinc ore processing fee is on an upward trend without any signs of stagnation or weakening. According to the quarterly reports of overseas mining enterprises, the production of major mining enterprises is normal, and there is no tendency for profit - related production cuts [25].

Report Industry Investment Rating - The strength analysis of zinc is neutral, indicating that the fundamentals show strong supply and weak demand. In the short - term, it will fluctuate, and in the medium - term, it remains bearish [2] Core Viewpoints of the Report - The supply side has seen an expected increase. With the increase in zinc concentrate supply, refineries and port inventories of zinc concentrate are relatively abundant, and refinery profits are at a historical median. After concentrated domestic refinery maintenance, production has increased, along with new projects. Thus, supply pressure has risen, and the surplus logic may be evident in the accumulation of social inventories. The consumption side has entered the traditional off - season. The downstream operating rate has declined marginally, and the space for restocking has shrunk. In the short - term, the accumulation of social inventories is relatively moderate, which makes short - sellers cautious. Coupled with the short - term improvement in the macro - environment, zinc prices are mainly in a range - bound state. In the medium - to long - term, a short - selling strategy on rallies is recommended. Regarding internal - external strategies, Shanghai zinc may be relatively weaker during the period of increased domestic supply and decreased demand in the off - season, so short - to medium - term (within a quarter) positive spread positions can be held [4] Summary by Relevant Catalogs 1. Industry Chain Vertical and Horizontal Comparison (Inventory, Profit, and Operating Rate) Inventory - Zinc ore and refinery finished product inventories have returned to high levels, while the visible inventory of zinc ingots has increased but remains low [10] Profit - Zinc mine profits are at the forefront of the industry chain, and smelting profits are at a median level. Mining enterprise profits are stable in the short - term and at a historical median. Smelting profits are also stable and at a historical median. Galvanized pipe enterprise profits are stable and at a relatively low level compared to the same period [12][13] Operating Rate - The smelting operating rate has recovered to a high level, while the downstream operating rate is at a historically low level. The zinc concentrate operating rate has rebounded to a historical median. The refined zinc monthly operating rate is at a high level compared to the same period. The operating rates of downstream galvanizing and die - casting zinc have decreased and are at a relatively low level [14][15] 2. Trading Aspect (Price, Spread, Inventory, Capital, Transaction, and Position) Spot - The spot premium has significantly declined. Overseas premiums are relatively stable, with a slight decrease in Antwerp, and the LME CASH - 3M structure has changed significantly [18][23] Spread - The near - end of Shanghai zinc shows a B structure, and the far - end structure is gradually moving out of the backwardation [25] Inventory - Domestic inventory is at a low level but shows a stable upward trend, and the position - to - inventory ratio has declined from a high level. LME total inventory has slightly increased in the short - term and is at a historical median. LME inventory is mainly concentrated in Singapore. CASH - 3M is related to LME off - warrant inventory. Bonded area inventory is stable, and the total global visible zinc inventory has slightly increased [35][37][39] Futures - The domestic position volume is at a relatively high level compared to the same period [43] 3. Supply (Zinc Concentrate, Refined Zinc, and Secondary Zinc Oxide) Zinc Concentrate - Zinc concentrate imports are at a high level, domestic zinc mine production is at a medium - to - low level, and the recovery rate of domestic and imported ore processing fees has slowed down. Ore arrival volume is at a medium level, and refinery raw material inventory is abundant, at a historical high compared to the same period [46][47] Refined Zinc - Smelting production has marginally recovered, refinery finished product inventory is at a medium - to - high level compared to the same period, and zinc alloy production is at a high level. Refined zinc imports are at a historical median [48][51] 4. Zinc Demand (Downstream Processed Materials and End - Users) Downstream - The consumption growth rate of refined zinc is positive. The downstream monthly operating rate has slightly decreased, and most are at a medium - to - low level compared to the same period. Downstream raw material and finished product inventories show different trends [59][62] End - Users - The real estate sector remains at a low level, while the power grid shows structural growth [75] 5. Overseas Factors (Natural Gas, Carbon, and Electricity) - The European Continental benchmark Dutch natural gas futures price, ICE EU carbon quota main contract price, and electricity prices in different European countries show different trends over time [77][78][79]

Report Industry Investment Rating No relevant information provided. Core View of the Report Macro - "anti - involution" brings strong bullish sentiment, but the zinc market sees increases in both ore and ingot supply. The demand side is in the off - season, and the zinc market's inventory accumulation trend is gradually emerging. The fundamentals are weak, and the rebound of zinc prices is limited. It is expected to maintain a weak consolidation in the short term, with an operating range of 21,500 - 22,500 yuan/ton, and the view of shorting on rallies remains unchanged. Continued attention should be paid to macro and downstream consumption conditions [3]. Summary According to the Directory 1. Market Review - The closing price of SMM1 zinc ingot average price increased by 0.09% to 22,360 yuan/ton; the closing price of the main Shanghai zinc contract decreased by 0.13% to 22,380 yuan/ton; the LME zinc closing price (electronic trading) increased by 0.09% to 2,738 US dollars/ton [11]. 2. Raw Material End 2.1 Zinc Concentrate - As of July 11, the inventory of imported zinc ore in Lianyungang was 80,000 tons, a decrease of 10,000 tons from the previous period; the total inventory of 7 ports was 333,000 tons, a decrease of 1,000 tons from the previous period [20]. - As of July 10, the production profit of zinc concentrate enterprises was 4,064 yuan/metal ton. In May, the import volume of zinc concentrate was 491,500 tons, a month - on - month decrease of 0.63% and a year - on - year increase of 84.26%; from January to May, the cumulative import volume was 2.204 million tons, a cumulative year - on - year increase of 52.46% [26]. - As of July 11, the domestic zinc concentrate processing fee was 3,800 yuan/metal ton, and the import zinc concentrate processing fee index increased to 66.48 US dollars/dry ton [3]. 2.2 Refined Zinc - The production profit of refined zinc enterprises continued to improve. As of July 10, the production profit was - 234 yuan/ton. In June, the domestic refined zinc output was 590,200 tons, a month - on - month increase of 40,800 tons, and the output in July is expected to remain high [37]. - The import profit window was closed. As of July 11, the import profit of refined zinc was - 1,523.72 yuan/ton. From January to May 2025, the cumulative import volume of refined zinc was 155,900 tons, a cumulative year - on - year decrease of 31,200 tons [40]. 3. Downstream Demand 3.1 Galvanizing - The galvanizing enterprise's operating rate increased by 1.81 percentage points to 58.29%. The raw material inventory and finished product inventory of galvanizing enterprises increased [46][49]. 3.2 Die - Casting Zinc Alloy - The price of zinc alloy fluctuated slightly. The average price of Zamak3 zinc alloy increased by 0.09% to 23,055 yuan/ton, and the average price of Zamak5 zinc alloy increased by 0.08% to 23,605 yuan/ton [53]. - The operating rate of die - casting zinc alloy enterprises increased by 4.8 percentage points to 53.94%. The raw material inventory and finished product inventory increased [56][59][60]. 3.3 Zinc Oxide - The price of zinc oxide remained stable. The average price of zinc oxide ≥99.7% was 21,400 yuan/ton, unchanged from the previous period [67]. - The operating rate of zinc oxide enterprises decreased by 0.30 percentage points to 55.84%. The raw material inventory decreased, and the finished product inventory fluctuated slightly [70][73]. 4. Inventory - As of July 14, the SMM zinc ingot three - place inventory was 86,100 tons, an increase in inventory. As of July 10, the SMM zinc ingot bonded area inventory was 6,000 tons, unchanged from the previous period [78]. - As of July 11, the SHFE inventory was 50,000 tons, an increase in inventory, and the LME inventory was 105,250 tons, a continuous decrease in inventory [81].

Report Industry Investment Rating - No information provided Core Viewpoints of the Report - Macro: As of July 14, according to CME's "Fed Watch," the probability of the Fed keeping interest rates unchanged in July is 93.3%, and the probability of a 25 - basis - point rate cut is 6.7%. In September, the probability of keeping rates unchanged is 59.7%, the probability of a cumulative 25 - basis - point rate cut is 36.2%, and the probability of a cumulative 50 - basis - point rate cut is 4.1% [5]. - Fundamentals: Driven by anti - involution and meeting expectations, the sentiment in the domestic commodity market is hot, and zinc prices have rebounded and then fluctuated. From a fundamental perspective, the cyclical supply of zinc ore is becoming looser. In 2025, several major zinc ore projects at home and abroad have production increase plans. The recovery of global zinc ore production has led to a continuous strengthening of the marginal spot TC of zinc ore. The increase in ore production is transmitted to the smelting end. With the improvement of smelting profits, the operating rate of domestic smelters has increased, and maintenance has been postponed. The output of refined zinc has marginally recovered, and the increasing production situation at the ore and smelting ends is expected to continue. On the demand side, trade disputes may drag down the global economic growth rate, and there are concerns about a contraction in the total zinc demand. Even if countries quickly reach new trade agreements and the global economic growth rate maintains resilience, there is little expectation of an increase in the total zinc demand, which will mainly remain at the existing level. Whether the demand is estimated to be optimistic or pessimistic, the zinc supply - demand balance tends to be in surplus, putting downward pressure on the long - term zinc price center [5]. - Strategy: In the short and medium term, the short - term sentiment in the domestic commodity market is hot, but there seems to be no clear expectation that can reverse the supply - demand situation, and it has little to do with the fundamentals of zinc. Consider laying out short positions in SHFE zinc on rallies [5]. Summary by Directory Part 1: Core Viewpoints - The macro situation shows different probabilities of the Fed's interest rate decisions in July and September. The fundamentals indicate a shift in the zinc supply - demand balance towards surplus, and the strategy suggests shorting SHFE zinc on rallies [5]. Part 2: Industrial Fundamentals - Supply Side - **Zinc Concentrate Production**: In April 2025, the global zinc concentrate production was 1.0192 million tons, a year - on - year increase of 9.71%. The international long - term contract TC price for zinc ore in 2025 was set at $80/ton, the lowest in history, and it was halved compared to the previous year. However, the long - term TC in 2024 was overestimated, and the trend of a marginally looser zinc ore supply remains unchanged [7]. - **Zinc Concentrate Imports and Processing Fees**: From January to May 2025, China's cumulative imports of zinc concentrate were 2.2055 million physical tons, a year - on - year increase of 52.83%. The increase in imports has boosted processing fees. As of July 11, the processing fee for imported ore was reported at $66.48/ton, and that for domestic ore was reported at 3,800 yuan/ton, with both having been raised several times recently [9]. - **Smelter Profit Estimation**: With the continuous increase in processing fees, smelter profits have been continuously improved [12]. - **Refined Zinc Production**: In April 2025, the global refined zinc output was 1.1384 million tons, a year - on - year increase of 0.52%. In June 2025, China's refined zinc production was 580,000 tons, a year - on - year increase of 6.8%. As profits recover, production is gradually increasing [16]. - **Refined Zinc Import Profit and Import Volume**: From January to May 2025, China's cumulative net imports of refined zinc were 145,400 tons. The import window for refined zinc is currently closed [19]. Part 3: Industrial Fundamentals - Consumption Side - **Initial Consumption of Refined Zinc**: In May 2025, China's galvanized sheet production was 2.34 million tons, a year - on - year increase of 2.63%. The apparent consumption of galvanized products is relatively sluggish, indicating weak actual demand and active destocking of hidden inventories in the industrial chain [24]. - **Terminal Consumption of Refined Zinc**: From January to May 2025, the cumulative year - on - year growth rate of infrastructure investment completion (excluding electricity) has declined. The back - end of the real estate market has improved month - on - month, but front - end indicators such as new construction and construction are still weak [26]. - **Terminal Consumption of Refined Zinc**: In May 2025, China's automobile production was 2.6485 million vehicles, a year - on - year increase of 11.65%. The production and sales of household appliances have cooled down due to the exhaustion of national subsidy funds in some regions, and the impact of subsequent tariffs should be noted [29]. Part 4: Other Indicators - **Inventory**: As the off - season approaches, social inventories of zinc have slightly increased [31]. - **Spot Premium/Discount**: As of July 11, the LME 0 - 3 premium/discount for zinc was reported at a discount of $0.36/ton. As the off - season approaches, the domestic spot premium has declined [34]. - **Exchange Positions**: As of July 4, the net long position of LME zinc investment funds was 20,595 lots. The weighted position of SHFE zinc has recently declined [37].

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Viewpoints of the Report - In the short term, affected by macro - sentiment, zinc prices may fluctuate. With continuous supply expansion and the downstream entering the off - season, domestic social inventories are expected to gradually accumulate, and zinc prices may face downward pressure [4]. - For trading strategies, one can consider short - selling zinc at high prices while being vigilant about macro risks, and temporarily hold off on arbitrage operations [4]. Group 3: Summary According to the Table of Contents Chapter 1: Comprehensive Analysis and Trading Strategies - **Industry Supply and Demand** - **Mine End**: This week, the domestic zinc concentrate market remained stable. The SMM Zn50 domestic weekly TC average price was flat at 3,800 yuan/metal ton, and the SMM imported zinc concentrate index rose by 1 US dollar/dry ton to 66.25 US dollars/dry ton. In July, although some domestic mines were under maintenance, the impact on production was small. Domestic zinc concentrate production is expected to increase, and zinc concentrate processing fees still have room for an upward adjustment [4]. - **Smelting End**: In July, domestic smelters had both maintenance and restart operations. Overall, domestic refined zinc production may increase by about 12,000 tons month - on - month. Recently, the processing fees for domestic zinc concentrates have increased significantly, the profit margins of smelters have expanded, and with sufficient domestic zinc concentrate supply, the enthusiasm of smelters to start production has increased significantly. Refined zinc supply is expected to increase [4]. - **Consumption**: Against the backdrop of the traditional off - season for zinc consumption from July to August, terminal orders have decreased significantly, and the enthusiasm of downstream enterprises to start production has declined. Coupled with the relatively high raw material inventory of downstream enterprises, it is expected that the downstream procurement sentiment will be poor in the near future. However, the continuation of the domestic "trade - in" policy may still boost consumption to some extent. Attention should be paid to the consumption situations in infrastructure, automotive, and home appliance sectors [4]. - **Inventory Data**: As of July 3, the total inventory of SMM seven - region zinc ingots was 82,400 tons, an increase of 2,900 tons from June 26 and an increase of 1,800 tons from June 30. The LME zinc inventory (on July 4) was 112,300 tons, a decrease of 6,900 tons from June 27 [4]. - **Trading Strategies** - **Unilateral Trading**: One can consider short - selling zinc in small quantities at high prices and be vigilant about macro risks. - **Arbitrage**: Temporarily hold off on operations [4]. Chapter 2: Market Data - **Spot Premium**: Information on the basis situation in major consumption regions and LME cash - 3M is provided [6]. - **Absolute Price and Monthly Spread, and Trading Volume and Open Interest of Shanghai Zinc**: Related data on these aspects are presented [12]. - **Social Inventory**: Information on social inventory, bonded area inventory, LME inventory, LME cancelled warrant ratio, warrants, and LME inventory by region is included [14][15]. Chapter 3: Fundamental Data - **Zinc Ore Supply** - **Production**: From January to April, global zinc concentrate production was 393,680 tons, a year - on - year increase of 5.07%. Among them, overseas zinc concentrate production was 274,180 tons, a year - on - year increase of 6.23%, and Chinese zinc concentrate production was 119,500 tons, a year - on - year increase of 2.49%. In May 2025, SMM zinc concentrate production was 325,000 metal tons, a month - on - month increase of 9.17% and a year - on - year increase of 3.17%. In June 2025, the expected zinc concentrate production was 342,600 metal tons, a month - on - month increase of 5.42%. In June, the monthly raw material inventory of smelters was 448,000 metal tons, a month - on - month increase of 6.41% and a year - on - year increase of 99.11%. This week, the zinc concentrate inventory at Lianyungang increased by 10,000 tons to 90,000 physical tons [25]. - **Import**: In May 2025, the imported zinc concentrate was 491,500 tons (physical tons), a month - on - month decrease of 0.63% and a year - on - year increase of 84.26%. From January to May, the cumulative imported zinc concentrate was 2,204,000 tons (physical tons), a cumulative year - on - year increase of 52.46%. The top three import source countries were Australia (22.10%), Peru (16.13%), and South Africa (10.49%). From June to July, the import window for zinc concentrates was basically closed, and although some previously locked - price imported ores flowed in, the volume of imported zinc concentrates was expected to decrease compared with the previous period [33]. - **Total Domestic Ore Supply**: In May 2025, the total domestic supply of zinc concentrates was about 546,200 metal tons, a year - on - year increase of 25.74%. From January to May, the cumulative total supply was 2,390,100 metal tons, a cumulative year - on - year increase of 13.99%. According to SMM data, in June 2025, the available days of inventory for refined zinc production enterprises were 29.7 days, an increase of 2 days month - on - month and 12.83 days more than the same period last year [36]. - **Zinc Ore Processing Fees**: In July, the monthly processing fee for domestic Zn50 zinc concentrates rose to 3,850 yuan/ton, an increase of 2,250 yuan/ton compared with December 2024. On July 4, the weekly processing fee for domestic Zn50 zinc concentrates was 3,800 yuan/ton, and the SMM imported zinc concentrate index rose by 1 US dollar/dry ton to 66.25 US dollars/dry ton. Currently, the profit of domestic mines is about 4,088 yuan/ton, domestic smelters have a production loss of about 228 yuan/ton (excluding by - product revenue), and with by - product revenue, smelters have a profit of about 1,477 yuan/ton [39][40]. - **Global Refined Zinc Production** - In the first half of last year, the global zinc market was in surplus, but since July, it has turned into a shortage. In 2024, the annual refined zinc production was 1,362.02 million tons, a cumulative year - on - year decrease of 2.01%. The annual demand was 1,364.78 million tons, a cumulative year - on - year decrease of 0.32%. The annual refined zinc shortage was 27,600 tons. - From January to April 2025, global refined zinc production was 442,580 tons, a year - on - year decrease of 10,550 tons or 2.33%. The main production cuts were concentrated in South Korea and Japan, mainly due to the reduction and suspension of production at South Korea's Seakpho smelter and Japan's Annaka smelter. - From January to April 2025, global refined zinc consumption was 427,470 tons, a year - on - year decrease of 6,390 tons or 1.47%. The decrease in consumption was concentrated in the United States and Mexico, mainly due to geopolitical risks and macro - economic uncertainties. - From January to April 2025, the global refined zinc cumulative surplus was 151,100 tons, and the surplus was gradually expanding [43]. - **Domestic Refined Zinc Supply** - **Smelter Operation**: From January to June, the average operating rate of domestic refined zinc enterprises was about 88.4%, a year - on - year increase of 2.3%. By scale, the operating rate of large - scale refined zinc enterprises was 89.3%, a year - on - year increase of 0.8%; that of medium - scale enterprises was 93.8%, a year - on - year increase of 4.8%; and that of small - scale enterprises was 71.2%, a year - on - year increase of 0.54%. In January and February this year, the operating rate of domestic smelters was lower than the same period last year, mainly due to smelter losses and the Spring Festival holiday. Since March, after smelters turned profitable, the operating rate has increased significantly year - on - year. - **Production**: From January to June, domestic refined zinc production was 3.24 million tons, a year - on - year increase of 1.84%. In the first half of 2024, domestic smelters were profitable, and with relatively sufficient raw material inventory, domestic production was relatively stable. In the second half of 2024, due to ore shortages and reduced processing fees, smelters turned to losses, and the scale of production cuts continued to expand. This year, domestic smelters' production gradually increased after turning profitable in March, so the year - on - year increase in production in the first half of the year was not significant [46]. - **Zinc Ingot Import**: In May 2025, the imported refined zinc was 26,700 tons, a month - on - month decrease of 1,500 tons or 5.36% and a year - on - year decrease of 39.85%. From January to May, the cumulative imported refined zinc was 155,900 tons, a cumulative year - on - year decrease of 16.66%. In May, the exported refined zinc was 1,400 tons, and the net imported refined zinc was 25,300 tons. The top three import countries in May were Kazakhstan (15,600 tons, 58.7%), Australia (3,600 tons, 13.56%), and Spain (2,800 tons, 10.57%). From June to July, the domestic refined zinc import window was basically closed. Although some previously locked - price imported zinc and duty - free imported zinc flowed in, the volume was expected to be significantly reduced compared with the previous period [48]. - **Downstream Consumption - Related Data** - **Primary Processing**: Information on the start - up situation and inventory of primary processing enterprises, including galvanizing, zinc alloy, and zinc oxide enterprises, is provided [57][59]. - **Real Estate Construction**: Data on real estate development investment, sales area, new construction area, construction area, completion area, and unsold area are presented, along with the seasonal data of the 100 - city land transaction premium rate and the daily transaction data of commercial housing in 30 large - and medium - sized cities [62][64]. - **Infrastructure Investment**: Trends in major infrastructure investment sectors, including power, transportation, and water conservancy, are provided [71]. - **Domestic Automobile**: Data on automobile production, including traditional fuel vehicles and new - energy vehicles, and export seasonality are presented [75][76]. - **Domestic White Goods**: Data on the monthly production of air conditioners, refrigerators, and washing machines are provided [78]. - **Raw Material Supply and Demand Summary Table**: The table shows the production, net import volume, and total supply of zinc concentrates and refined zinc from January 2024 to May 2025, including year - on - year changes [56].

Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. Core Viewpoints of the Report - In the context of trade protection, the global economic downward pressure persists. The supply of zinc ore and zinc ingots tends to be loose, while the demand faces insufficient momentum in traditional consumption sectors and a slowdown in the growth rate of emerging consumption sectors. The degree of supply - demand surplus expands. It is expected that the zinc price center will gradually decline under pressure in the second half of the year, ranging from 21,000 to 23,000 yuan/ton, with a pattern of being lower first and then higher. If the macro - economy deteriorates significantly, the zinc price may seek support from the mine cost [4][94][96]. Summary According to Relevant Catalogs 1. Zinc Market Review - In the first half of the year, the main contract price of Shanghai zinc showed a downward trend in the oscillation center. In the first quarter, due to concerns about tariff increases and the strong US dollar, combined with the Spring Festival holiday in China, the zinc price was weak. In March, the price stabilized and rebounded and oscillated around 24,000 yuan/ton. In the second quarter, due to unexpected US tariffs, the zinc price hit a new low in the first half of the year, then stabilized and rebounded. By June 30, the main contract price of Shanghai zinc closed at 22,495 yuan/ton, a decrease of 10.96% from the beginning of the year. The London zinc price also showed a downward trend in the oscillation range, closing at 2,741 US dollars/ton on June 30, a decrease of 6.26% from the beginning of the year [8]. 2. Macroeconomic Analysis 2.1 US Situation - In the first half of 2025, the US economy showed signs of a slowdown, with inflation potentially rising in the future. The Fed was cautious about interest rate cuts. In the second half of the year, the continuous impact of Trump's tariff policy will further suppress economic growth. The "Big Beautiful Act" may ease the economic decline to some extent but may also lead to secondary inflation. The Fed is expected to cut interest rates 2 - 3 times to relieve the economic slowdown pressure, and the US dollar index is in a downward channel in the medium - to - long term [11][12]. 2.2 Eurozone Situation - In the first half of 2025, the Eurozone economy showed a mild recovery. The European Central Bank's continuous interest rate cuts stimulated investment and real - estate demand, and net exports increased. Inflation continued to decline. In the second half of the year, the Eurozone economy faces both opportunities and challenges. Although there is still room for interest rate cuts, the threat of tariffs may limit economic growth, and inflation may rebound [13][14]. 2.3 China's Situation - In the first half of 2025, China's economy showed resilience, with stable GDP growth. Policies focused on implementing existing measures. In the second half of the year, the economic growth rate may slow down, with exports, consumption, and manufacturing investment facing challenges. However, infrastructure investment will remain stable, and the annual GDP growth target is still expected to be achieved [16][17]. 3. Zinc Fundamental Analysis 3.1 Zinc Ore Supply - **Global Zinc Concentrate Supply Turns from Tight to Loose**: In 2025, the global zinc concentrate supply increased. Overseas, new projects climbed production smoothly, and some mines resumed production and increased production. In China, although the cumulative output from January to May decreased year - on - year, it is expected to increase in the second half of the year. The annual global increment is expected to be 55 - 600,000 tons [30]. - **Zinc Concentrate Processing Fees Rise Significantly, and Zinc Ore Imports Remain High**: Since the fourth quarter of 2024, processing fees have rebounded. By June 2025, the average monthly domestic and foreign processing fees increased significantly. In the second half of the year, there is still room for growth, but the growth rate may slow down. From January to May 2025, the cumulative zinc concentrate imports increased by 52.5% year - on - year, and it is expected to maintain a high level in the second half of the year [35][36]. 3.2 Refined Zinc Supply - **Overseas Smelters Have a Mixture of Production Cuts and Expansions, and Supply Disruption Risks Remain**: From January to April 2025, the global refined zinc production decreased year - on - year. Overseas smelters had a mixture of production cuts and restarts. Due to high costs, there is a risk of production cuts in overseas smelters [41]. - **Refined Zinc Supply Recovers Strongly from January to June, and the Zinc Ingot Import Window Closes Again**: From January to June 2025, China's refined zinc production increased year - on - year. It is expected to maintain a high level of 550,000 - 600,000 tons per month in the second half of the year. The annual output is expected to reach 6.6 million tons, an increase of 6.84% year - on - year. The import of zinc ingots decreased year - on - year, and it is expected to remain weak in the second half of the year [47][48]. 3.3 Refined Zinc Demand - **Overseas Terminal Consumption Shows a Mixed Picture, and the Medium - to - Long - Term Outlook Is Uncertain**: In the first half of 2025, the global refined zinc demand decreased slightly year - on - year. In the US, the real - estate market was weak, and the auto market may slow down in the second half of the year. In the Eurozone, the real - estate market showed signs of improvement, and the auto market had a mixed performance [57][58][59]. - **Initial - Stage Enterprises' Operating Rates Are Expected to Decline, and Galvanized Steel Exports Remain Strong**: The operating rates of initial - stage enterprises followed the seasonal pattern. In the second half of the year, the operating rates are expected to decline in the third quarter and rebound in the fourth quarter. Galvanized steel exports were strong in the first half of the year but are expected to decline in the third quarter and stabilize in the fourth quarter [72][73]. - **Policy Support Increases, and Terminal Consumption Is Differentiated**: In the traditional consumption sector, infrastructure investment is expected to recover in the second half of the year, the real - estate market will continue to bottom out, the auto market will maintain good momentum, and the home - appliance market will face internal sales slowdown pressure. In the emerging consumption sector, the photovoltaic market may slow down, while the wind - power market is expected to maintain high growth [74][77][83]. 3.4 Inventory - **Overseas Inventory Continues to Decline from a High Level, and Domestic Inventory First Increases and Then Decreases**: In the first half of the year, the LME inventory continued to decline from a high level. In the second half of the year, it is expected to remain at a high level with a narrowing decline. The domestic inventory was at a relatively low level. In the second half of the year, there is still pressure to increase inventory in the third quarter, and it is expected to decline in the fourth quarter [92]. 4. Summary and Outlook - In the second half of the year, the global zinc concentrate supply may accelerate, and the annual increment will exceed 500,000 tons. The supply of refined zinc is expected to remain high, while the demand faces downward risks. Overall, the supply - demand surplus will expand, and the zinc price is expected to decline gradually, ranging from 21,000 to 23,000 yuan/ton, with a pattern of being lower first and then higher [94][96].

Core Viewpoint - Zinc prices experienced fluctuations in June, initially declining due to weak demand and increased supply, but rebounded later in the month driven by improved macro sentiment and disruptions in overseas smelters [2] Group 1: Macroeconomic Factors - The US dollar index has seen a significant decline since the beginning of the year, dropping to around 97, which has positively impacted dollar-denominated commodities [3] - Expectations for interest rate cuts by the Federal Reserve have increased, with potential cuts anticipated within the year [3] - Geopolitical tensions have eased, particularly in the Israel-Palestine conflict, leading to stabilization in oil prices [3] Group 2: Supply Dynamics - Global zinc mine production in April was 1.0192 million tons, a slight decrease of 0.6% month-on-month but an increase of 9.7% year-on-year [4] - Domestic zinc concentrate production in May rose by 9.2% month-on-month to 325,000 tons, while cumulative production from January to May saw a year-on-year decline of 3.4% [4] - Zinc processing fees have been rising, with July's average processing fee for domestic zinc concentrate increasing by 200 RMB per ton to 3,850 RMB per ton [4] Group 3: Domestic Production Expectations - China's refined zinc production in May was 583,000 tons, a slight increase from April but a year-on-year decline of 2.3% [5] - The expectation for increased domestic refined zinc production is strong due to improved smelter profits and reduced maintenance schedules [5] - The import of refined zinc has decreased slightly to 26,700 tons in May, with a cumulative decline of 16.65% year-on-year for the first five months [5] Group 4: Inventory and Pricing Trends - LME zinc inventory has decreased from 195,000 tons in mid-April to 119,000 tons, indicating a tightening supply [6] - Domestic refined zinc inventory initially increased but has since decreased, remaining at lower levels compared to previous years [6] - The current market shows a narrowing of the LME 0-3 zinc spot premium, which has implications for potential warehouse risks similar to those seen in copper [6] Group 5: Demand Conditions - The demand for zinc remains weak due to seasonal factors, with processing enterprises experiencing declining operating rates [7] - The operating rate for galvanizing enterprises dropped to 56.21%, indicating reduced orders and production [7] - Overall, construction and manufacturing sectors are showing signs of weakness, with real estate and infrastructure investment growth slowing [7] Group 6: Overall Market Outlook - The combination of a weak dollar, easing geopolitical risks, and expectations of Fed rate cuts has led to a recovery in the non-ferrous metals market [8] - The supply side remains relatively loose due to steady production from both domestic and international mines, while smelter profits are recovering [8] - Despite the positive macro factors, the seasonal demand weakness and inventory dynamics suggest a cautious outlook for zinc prices [8]

Group 1 - Zinc main contract has shifted to a weak oscillation after testing the 23,000 yuan/ton resistance three times, with a recent drop to 21,660 yuan/ton, marking a year-low [1] - Global zinc concentrate production in April increased by 9.7% year-on-year to 1.0192 million tons, while domestic production in Q1 rose by 6.42% [1] - Domestic zinc concentrate production profits have rebounded to 3,900-4,600 yuan/ton, leading to an expected increase in operating rates by 5.5 percentage points in June [1] Group 2 - In April, global refined zinc production grew by 1% month-on-month, remaining stable year-on-year, while domestic production faced a decline due to losses [2] - The downstream consumption index for zinc fell by 1.7 percentage points in May, with significant increases in inventories for galvanized products [2] - The automotive sector saw a slight increase in production, but overall demand remains constrained by external tariff policies [3] Group 3 - LME zinc inventory decreased by 48% year-on-year to 126,000 tons, continuing a trend of inventory reduction [3] - The short-term outlook for zinc prices is pressured by increased supply and seasonal demand weakness, but high smelting costs and ongoing inventory depletion may limit price declines [3] - Positive signals from US-China tariff negotiations and a potential recovery from the consumption off-season could improve the supply-demand balance and support a price rebound [3]