1. Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. 2. Core Views of the Report - The sharp decline in zinc prices this week was due to the cross - variety liquidity shock caused by the weakening of precious metals and the fundamental risks previously highlighted. The demand support in the zinc market in the first quarter is not strong, and there is an overvaluation risk when zinc prices are above 25,000 yuan/ton [3]. - From the perspective of fundamentals and market sentiment, zinc prices may continue to decline weakly before the Spring Festival, but the current price drop may help build momentum for the peak season market after the festival [3]. - In terms of fundamentals, short - term zinc supply continues to be marginally loose. The arrival volume of domestic zinc ore in January was high, and port inventories reached a three - month high. Some domestic smelters have sufficient raw material inventories, and the planned zinc ingot production in February is expected to decrease by 52,000 - 57,000 tons month - on - month [3]. - On the downstream side, the decline in prices has marginally improved the willingness to purchase, but the procurement intensity of leading enterprises has not met market expectations. Downstream enterprises have entered the seasonal shutdown cycle for the Spring Festival, and the weighted operating rate has returned to the historical seasonal level. It is predicted that the peak inventory accumulation during the Spring Festival will be about 210,000 tons, and the inventory will start to decline rapidly in late March [3]. - In terms of price, the current profit margin of smelters provides cost support at around 23,000 yuan/ton [3]. - In terms of the internal - external price ratio, it is expected that the structure of weak domestic and strong external markets will continue in the first quarter. The uncertainty of European natural gas prices has postponed the expectation of overseas smelter复产, and some mines have lowered their production plans in Q4 2025, which provides continuous support for the external market. There is also a possibility that the zinc ingot export window may open again [3]. 3. Summary by Directory 3.1 Weekly Views - The decline in zinc prices was due to precious metal weakness and fundamental risks. Before the Spring Festival, zinc prices may continue to decline, but it may benefit the post - festival market. The short - term supply is loose, and downstream demand is affected by the Spring Festival shutdown. The expected peak inventory during the Spring Festival is about 210,000 tons, and the inventory will start to decline in late March. The cost support is around 23,000 yuan/ton, and the internal - external price ratio may maintain a weak domestic and strong external structure [3]. 3.2 Historical Spring Festival Data - The relationship between inventory reduction time and zinc price trends is not significant, and it mainly depends on long - term supply - demand logic. Zinc prices mostly decline during the Spring Festival. Historically, the first quarter is often at a relatively high price level, and the sharp decline in pre - festival zinc prices this year may improve downstream purchasing willingness and increase the probability of rapid post - festival inventory reduction [4]. 3.3 Monthly Balance Sheet - It is estimated that the zinc ingot production in January 2026 will be about 532,000 tons, and there will be a small - scale maintenance in February, with a planned month - on - month decrease of 52,000 tons. In terms of imports and exports, the zinc ingot export volume increased significantly in November and December 2025. In 2026, a low import volume is expected. It is predicted that the peak inventory of domestic zinc ingot social inventory during the Spring Festival will reach 210,000 tons, and the inventory will start to decline rapidly from March to April [5]. 3.4 Main Industry News - Antamina's 2026 production guidance was further reduced by 70,000 metal tons. MMG's zinc ore production in Q4 2025 increased by 2% year - on - year. Glencore's 2025 zinc production increased by 7% year - on - year, and its 2026 production guidance is 700,000 - 740,000 tons. Xinjiang Huoshaoyun Lead - Zinc Mine announced a public tender for the sale of 50,000 tons of lead - zinc ore [7]. 3.5 Zinc Concentrate Production and Processing Fees - In December 2025, domestic zinc concentrate production was 287,800 metal tons, a month - on - month decrease of 7.58% and a year - on - year increase of 5.85%. The cumulative production from January to December was 3.657 million tons, a cumulative year - on - year decrease of 1.21%. The production in January 2026 is expected to be 292,600 tons. The domestic zinc concentrate TC has stopped falling and stabilized since late December, with an average of 1,500 yuan/metal ton this week. The import zinc concentrate processing fee index is 25.5 US dollars/dry ton, a week - on - week decrease of 4.25 US dollars/dry ton, and the import profit of zinc ore has dropped to a small loss [10]. 3.6 Zinc Concentrate Import - In December 2025, the import volume of zinc ore and concentrates was 462,500 tons, a month - on - month decrease of 10.87% and a year - on - year increase of 1.15%. The cumulative import volume from January to December was 5.3305 million physical tons, a cumulative year - on - year increase of 30.1%. The main import sources are Peru, Australia, and South Africa. Due to the arrival cycle, the import volume in December decreased, but it is expected to increase significantly in January. As of February 4, 2026, the import profit and loss of zinc concentrate was - 64 yuan/ton, and the zinc ore import window has been closed since January 26 [14]. 3.7 Zinc Concentrate Port Inventory - As of January 29, the weekly inventory of seven major ports was 377,500 tons, a week - on - week increase of 81,000 tons, reaching a three - month high. The arrival volume of zinc concentrate decreased significantly in December, but it increased again in early January after the import window opened in late December [18]. 3.8 Zinc Smelter Production - In January 2026, SMM's refined zinc production in China increased by 8,500 tons month - on - month to 560,600 tons, slightly lower than the initial expectation. The raw material inventory days of domestic smelters in January increased by 1.4 days to 23.7 days. Although the processing fee has only stopped falling and remains at a low level since December, the significant increase in zinc prices in January has repaired the smelter's profit. It is expected that the domestic zinc ingot production in February will decrease by 52,000 - 57,000 tons month - on - month, and the production level is basically the same as that in January after excluding the difference in the number of days in the month. The actual demand will be the key to maintaining the smelter's profit, which needs to be verified during the post - Spring Festival peak season [24]. 3.9 Refined Zinc Import - In December 2025, China imported 8,700 tons of refined zinc and exported 27,200 tons, with a net export of 18,500 tons. The main import countries are Kazakhstan and Iran, and the main export destinations are Taiwan, China, Singapore, and Hong Kong. The domestic zinc ingot spot export window has been closed since mid - December, and the import loss has expanded as of February 5. It is expected that the pattern of tight external and loose internal markets will continue in the first half of 2026, and there is a possibility that the zinc ingot export window may open again [27]. 3.10 Downstream Zinc Processing - The weighted operating rate of domestic zinc downstream primary processing enterprises this week was 39.52%, a week - on - week decrease of 7.16 percentage points, returning to the historical seasonal level. The average holiday days of downstream enterprises are 22 days, an increase of 1 day year - on - year. All enterprises will resume work from late February to early March [29]. - The operating rate of galvanizing enterprises on February 5 was 38.6%, a week - on - week decrease of 7.59 percentage points. The raw material inventory increased slightly, and the finished product inventory decreased. The average holiday days of 34 galvanizing sample enterprises are 20 days, an increase of 1 day year - on - year, and they will resume production from late February to early March [31]. - The operating rate of die - casting zinc alloy enterprises on February 5 was 42.42%, a week - on - week decrease of 3.95 percentage points. The raw material inventory decreased, and the finished product inventory increased. The average holiday days of 20 die - casting zinc alloy sample enterprises are 23.1 days, an increase of 1.1 days year - on - year, and they will resume work around the eighth day of the first lunar month or the Lantern Festival [39]. - The operating rate of zinc oxide enterprises on February 5 was 50.37%, a week - on - week decrease of 8.15 percentage points. The raw material inventory decreased to the historical low level, and the finished product inventory increased to the historical high level. The industry shows obvious differentiation in holiday arrangements, and the downstream orders also show structural differences [45]. 3.11 Domestic Inventory - As of January 30, the total inventory of refined zinc in the Shanghai Futures Exchange was 65,200 tons, a week - on - week decrease of 7,997 tons. As of February 5, the SMM seven - region zinc ingot social inventory was 133,900 tons, a week - on - week increase of 16,700 tons. It is expected that the domestic market will enter the seasonal inventory accumulation period during the Spring Festival, with a peak inventory of about 210,000 tons, and the inventory will start to decline in late March [52]. 3.12 LME Inventory - LME inventory has been increasing in Singapore, Hong Kong, and Kaohsiung warehouses since late October. It reached a recent peak of 112,300 tons on January 19 and then continued to decline slightly. As of February 5, the LME inventory was 107,800 tons, a week - on - week decrease of 1,950 tons. The LME cancellation warrant ratio rose to a three - month high, with 13,275 tons of cancelled warrants. The global visible inventory this week was 234,300 tons, a week - on - week increase of 9,200 tons, showing a seasonal inventory accumulation trend [55]. 3.13 Structure & Arbitrage - Since late January, the domestic spot price has been at a slight discount to the Shanghai zinc main contract. On Thursday this week, the average price in Shanghai was at a discount of 30 yuan/ton to the main 2603 contract, a narrowing of 25 yuan/ton compared with last week. The Contango structure of Shanghai zinc has significantly converged. It is recommended to pay attention to the 4 - 7 inter - period positive arbitrage opportunity [59]. - The outer market has returned to the Contango structure since mid - December. As of February 5, the LME zinc 0 - 3 spread was at a discount of 20.75 US dollars/ton, and the discount range is narrowing. In the case of continuous inventory reduction overseas, the LME market shows an abnormal convex structure, and a positive arbitrage strategy can be considered [62]. - The CashReport and WarrantBandingReport show that the market concentration has increased slightly recently, and there is one position with a 30 - 39% warrant holding [63].

Report Title - Zinc Futures and Options February 2026 Report [1] Report Industry Investment Rating - Not mentioned in the provided content Core Viewpoints - **Macro**: The Fed has paused rate cuts, and the manufacturing sectors in China and the US show resilience. Geopolitical disturbances, the emphasis on key supply chains in AI, high - tech manufacturing, and energy transition have amplified the positive impact on the supply side. Capital flowing from precious metals to non - ferrous metals has boosted sector rotation. However, there is a divergence between strong expectations and actual demand, and a significant correction due to weakening expectations should be guarded against [6]. - **Supply**: Zinc concentrate supply is seasonally tight. Domestic smelters have completed winter stockpiling, but some lead - zinc mines in China had routine maintenance and shutdowns in January, weakening domestic supply. Overseas mines are also affected by factors like the Iran situation and community protests. European natural gas price hikes and low LME inventories have strengthened the external market. Domestic refined zinc shows a situation of weak supply and demand and is in a stage of inventory accumulation [6]. - **Demand**: In 2026, the real estate sector is stabilizing and recovering. Manufacturing is expected to be led by high - end manufacturing and AI development. There is a divergence between price increases and seasonal weakness in the downstream. In terms of imports and exports, the export performance was good in 2025, and in 2026, the incremental space for zinc demand is still mainly in the overseas market. The domestic and export demand for galvanized products is expected to remain strong [6]. - **Inventory**: Domestic inventory is recovering, while LME zinc inventory has recovered from a low level but remains relatively tight. The LME 0 - 3 spread is in a slight contango state, and the strong LME zinc price boosts the domestic market [6]. - **Outlook**: In February 2026, geopolitical changes will affect the non - ferrous and precious metals sectors. Supply - demand mismatches around the Spring Festival and capital flows during the holiday may lead to a temporary cooling of the market. However, the downside space is expected to be limited. Buy - hedgers can consider the opportunity to buy on dips. The market is expected to operate in the range of 24,000 - 27,000 yuan/ton, and after a full correction, a long - biased strategy on dips can be considered [6]. Summary by Directory Global Macro and Zinc Market - **Long - term Zinc Price Trends**: After the subprime mortgage crisis, factors such as global liquidity floods, supply - side reforms, the Fed's QE, the European energy crisis, the COVID - 19 pandemic, the Fed's tightening cycle, and the current Fed's rate - cut expectations and geopolitical disturbances have all affected zinc prices [10]. - **Weakening US Dollar Trend**: In 2026, the Fed is expected to cut rates twice. Concerns about policy continuity and independence, political risks, global capital re - balancing, and the strengthening of external currencies all contribute to a weakening US dollar [12]. - **Manufacturing Recovery**: Zinc prices are highly correlated with global manufacturing sentiment. The Fed's rate - cut expectations and the recovery of manufacturing data support non - ferrous metals. However, the strong performance of the sector has exceeded the manufacturing recovery rhythm, and there is a divergence between strong expectations and weak reality [16]. - **US Stagflation Expectations**: The US employment market growth is slowing, inflation is volatile, and geopolitical situations are causing oil price fluctuations [19]. - **Domestic Policy Support**: China will maintain a loose fiscal and moderately loose monetary policy in 2026. There will be continued optimization and upgrading in consumer goods and large - scale equipment renewal, and infrastructure construction related to technology development will also continue [24]. Zinc Supply Analysis - **Overseas Zinc Mine Production**: In Q3 2025, the total output of tracked mines decreased slightly quarter - on - quarter by 0.9% but increased year - on - year by 9.69%. From January to September 2025, it increased year - on - year by 11.35%, with an incremental contribution of about 400,000 tons. Mines like Antamina, Kipushi, Tara, and Gamsberg are the main sources of incremental production in 2025 [31]. - **Global Zinc Mine Output**: In 2025, global zinc mine supply rebounded after three years of decline. In 2026, there is still room for growth, but overseas growth may slow down while China's growth may emerge. The copper/zinc ratio may lead to an adjustment in mine - end increments [37]. - **Domestic Zinc Mine Production**: In 2025, domestic zinc concentrate production increased by about 70,000 tons year - on - year. In 2026, projects like Huoshaoyun and Zhugongtang may bring an increase of 100,000 - 200,000 tons and 50,000 - 80,000 tons respectively [39]. - **Zinc Concentrate Imports**: In 2025, zinc concentrate imports reached 5,325,542.08 tons, a year - on - year increase of 30.62% [44]. - **Global Refined Zinc Production**: In 2025, refined zinc production recovered to some extent, but the improvement from the mine end to zinc ingot production was affected by overseas profit factors [47]. - **Processing Fees**: In January 2026, domestic and imported processing fees weakened seasonally, indicating a strong mine end [51]. - **Refined Zinc Enterprise Profits**: Refined zinc enterprises are in a loss situation, but the long - term contract price in 2026 has generally increased [55]. - **Refined Zinc Output**: In 2025, refined zinc output increased with profit recovery, but it weakened at the end of the year and in early 2026, and is expected to decline during the Spring Festival [59]. - **Refined Zinc Imports and Exports**: In 2025, imports decreased by 31.78% year - on - year, and exports increased by 459.90%. In 2026, there is still a possibility of intermittent export window openings [63]. Zinc Demand Analysis - **Apparent and Actual Consumption**: In 2025, the apparent consumption of zinc ingots was mostly higher than the five - year average and slightly higher than the actual consumption, indicating an improvement in supply. However, supply decreased significantly at the end of the year [69]. - **Galvanizing Enterprises**: The operating rate of galvanizing enterprises was weak, with limited recovery in actual consumption. There is still an expectation of capacity release, and export demand has development potential [73]. - **Zinc Die - Casting Enterprises**: The operating rate of zinc die - casting alloy enterprises was better in the first half of 2025 but weakened in the second half. There was a polarization between large and small factories [76]. - **Zinc Oxide Industry**: The operating rate of the zinc oxide industry was weak, with a significant decline from May to June and a continuous decline from October to December [80]. Zinc Inventory Analysis - **Exchange Inventories**: As of the end of January 2026, LME zinc inventory was 110,000 tons, a year - on - year decrease of 39.13%, and SHFE zinc inventory was 65,154 tons, a year - on - year increase of 199.13%. Both overseas and domestic inventories are at relatively low historical levels [86]. - **Social Inventories**: As of January 2026, social inventories have recovered from a low level and are at a relatively high level in recent years, indicating a situation of increasing supply and weakening demand [89]. Zinc Supply - Demand Balance - **Global Refined Zinc**: In 2025, global refined zinc supply is expected to be slightly in surplus, and in 2026, the surplus is expected to expand to 290,000 tons [94]. - **Domestic Refined Zinc**: In 2025, domestic refined zinc turned to a slight surplus. In 2026, domestic production is expected to increase further, and there may be intermittent export opportunities, maintaining a surplus pattern [97]. Zinc Technical Analysis - Since the fourth quarter of 2025, zinc has been in an upward channel. In January 2026, it accelerated its rise but faced adjustment pressure at the end of the month. After breaking through last year's high, the upper - resistance level has expanded above 27,000 yuan. A long - biased strategy on dips can be considered [102]. Arbitrage Analysis - **Domestic - Overseas and Cross - Variety Arbitrage**: The zinc Shanghai - London ratio is highly correlated with the RMB - US dollar exchange rate. The import window for zinc has opened intermittently, and there may be opportunities for cross - market reverse arbitrage and export. The copper - zinc ratio reached a new high at the end of 2025, but there may be room for the ratio to return in 2026 [109]. Zinc Option Market - **Option Volatility Analysis**: In 2025, the historical and implied volatilities of Shanghai zinc options showed a trend of rising and then falling. Different option strategies can be adopted according to different volatility levels [113]. Summary: Zinc Market Outlook and Operational Suggestions - In February 2026, zinc is expected to maintain high volatility. Supply - demand mismatches, macro and mine - end changes may intensify fluctuations. The market is expected to operate in the range of 24,000 - 27,000 yuan/ton. Option strategies such as selling out - of - the - money calls during the consolidation period and buying zinc and selling copper for arbitrage can be considered. For the industrial side, buy - hedging can be considered at low levels after a full correction, and sell - hedging opportunities currently exist [121].

1. Report Industry Investment Rating - Not provided in the document 2. Core Viewpoints of the Report - This week, the main contract of Shanghai zinc futures showed a pattern of rising first and then pulling back, with a weekly increase of 3.25% and an amplitude of 7.32%. It is expected that Shanghai zinc will be adjusted strongly, with the support level of MA5 to be focused on, and the price range is estimated to be between 24,500 - 25,700 yuan/ton [4]. 3. Summary by Relevant Catalogs 3.1 Weekly Summary - **Market Review**: This week, the main contract of Shanghai zinc futures rose first and then pulled back, with a weekly increase of 3.25% and an amplitude of 7.32%. As of the end of this week, the closing price of the main contract was 24,750 yuan/ton [4]. - **Market Outlook**: Macroeconomically, the central bank of China decided to lower the re - loan and rediscount rates by 25 basis points, indicating that there is still room for reserve requirement ratio cuts and interest rate cuts this year. In the United States, the number of initial jobless claims last week unexpectedly dropped to 198,000, the lowest since November last year, and the US dollar rebounded to a more than one - month high. Fundamentally, the import volume of upstream zinc ore is at a high level, but domestic zinc mines are reducing production at the end of the year. The competition among domestic smelters for purchasing domestic ores has intensified, and the processing fees at home and abroad have both dropped significantly. The profits of domestic smelters have shrunk, and it is expected that production will continue to be restricted. Recently, the price of LME zinc has pulled back, the Shanghai - London ratio has rebounded, and the export window may close again. On the demand side, the downstream market is gradually entering the off - season. The real estate sector is a drag, and the infrastructure and home appliance sectors are also weakening, while the automotive and other fields have some bright spots due to policy support. The downstream market mainly purchases on - demand at low prices. Recently, the zinc price has risen rapidly, downstream purchases are scarce, the spot premium has been lowered, and domestic inventories have decreased slightly. LME zinc inventories have remained stable, and the spot premium has remained at a low level. Technically, the position has increased and the price is strong, with a strong bullish atmosphere, breaking through the upper edge of the upward channel [4]. 3.2 Spot and Futures Market - **Price Changes**: As of January 16, 2026, the closing price of Shanghai zinc was 24,750 yuan/ton, an increase of 780 yuan/ton or 3.25% compared with January 9, 2026. As of January 15, 2026, the closing price of LME zinc was 3,314.5 US dollars/ton, an increase of 179.5 US dollars/ton or 5.73% compared with January 9, 2026 [7]. - **Net Position Adjustment**: As of January 16, 2026, the net position of the top 20 in Shanghai zinc futures was adjusted. The position volume of Shanghai zinc was 252,985 lots, an increase of 34,932 lots or 16.02% compared with January 9, 2026 [13]. - **Price Spreads**: As of January 16, 2026, the aluminum - zinc futures price spread was 825 yuan/ton, an increase of 1,185 yuan/ton compared with January 9, 2026. The lead - zinc futures price spread was 7,275 yuan/ton, an increase of 660 yuan/ton compared with January 9, 2026 [18]. - **Premium and Discount**: As of January 16, 2026, the spot price of 0 zinc ingot was 24,810 yuan/ton, an increase of 800 yuan/ton or 3.33% compared with January 9, 2026. The spot discount was 25 yuan/ton, a decrease of 130 yuan/ton compared with last week. As of January 15, 2026, the price difference between the near - month and 3 - month contracts of LME zinc was - 27.62 US dollars/ton, an increase of 14.95 US dollars/ton compared with January 8, 2026 [23]. - **Inventory Changes**: As of January 15, 2026, the LME refined zinc inventory was 106,700 tons, a decrease of 1,300 tons or 1.2% compared with January 8, 2026. As of January 16, 2026, the Shanghai Futures Exchange refined zinc inventory was 76,311 tons, an increase of 2,459 tons or 3.33% compared with last week. As of January 15, 2026, the domestic refined zinc social inventory was 106,400 tons, a decrease of 6,900 tons or 6.09% compared with January 8, 2026 [26]. 3.3 Industry Situation 3.3.1 Upstream - **Zinc Ore Production and Import**: In October 2025, the global zinc ore production was 1.1009 million tons, a month - on - month increase of 1.21% and a year - on - year increase of 4.87%. In November 2025, the import volume of zinc ore concentrates was 519,018.96 tons, a month - on - month increase of 52.31% and a year - on - year increase of 14.06% [32]. 3.3.2 Supply Side - **Global Refined Zinc Supply Shortage**: In October 2025, the global refined zinc production was 1.2187 million tons, an increase of 108,400 tons or 9.76% compared with the same period last year. The global refined zinc consumption was 1.2193 million tons, an increase of 44,200 tons or 3.76% compared with the same period last year. The global refined zinc shortage was 600 tons, compared with a shortage of 64,800 tons in the same period last year. According to the World Bureau of Metal Statistics (WBMS) report, in September 2024, the global zinc market supply - demand balance was - 35,700 tons [37][38]. - **Expected Decline in Refined Zinc Production**: In November 2025, the zinc production was 654,000 tons, a year - on - year increase of 13.3%. From January to November 2025, the cumulative zinc output was 6.842 million tons, a year - on - year increase of 9.5% [41]. - **Significant Increase in Refined Zinc Exports**: In November 2025, the import volume of refined zinc was 18,229.93 tons, a year - on - year decrease of 48.15%. The export volume of refined zinc was 42,815.55 tons, a year - on - year increase of 8748.45% [45]. 3.3.3 Downstream - **Galvanized Sheet (Strip) Exports Stabilized and Rebounded**: From January to November 2025, the inventory of galvanized sheets (strips) of major domestic enterprises was 982,200 tons, a year - on - year increase of 13.63%. In November 2025, the import volume of galvanized sheets (strips) was 36,700 tons, a year - on - year decrease of 19.91%. The export volume of galvanized sheets (strips) was 317,900 tons, a year - on - year increase of 11% [48][49]. - **Decline in New Housing Starts**: From January to November 2025, the new housing start area was 534.567 million square meters, a year - on - year decrease of 20.58%. The housing completion area was 394.5393 million square meters, a year - on - year decrease of 17.58%. From January to November 2025, the funds in place for real estate development enterprises were 851.4519 billion yuan, a year - on - year decrease of 11.9%. Among them, personal mortgage loans were 117.8591 billion yuan, a year - on - year decrease of 15.1% [54][55]. - **Decline in Infrastructure Investment Growth Rate**: In November 2025, the real estate development climate index was 91.9, a decrease of 0.52 compared with last month and a decrease of 0.61 compared with the same period last year. From January to November 2025, the infrastructure investment increased by 0.13% year - on - year [60][61]. - **Increase in Refrigerator and Air - Conditioner Production**: In November 2025, the refrigerator production was 9.442 million units, a year - on - year increase of 5.6%. From January to November 2025, the cumulative refrigerator production was 99.342 million units, a year - on - year increase of 1.2%. In November 2025, the air - conditioner production was 15.026 million units, a year - on - year decrease of 23.4%. From January to November 2025, the cumulative air - conditioner production was 245.361 million units, a year - on - year increase of 1.6% [63]. - **Stable and Improving Automobile Production and Sales**: In December 2025, the sales volume of Chinese automobiles was 3,272,229 units, a year - on - year decrease of 6.2%. The production volume of Chinese automobiles was 3,295,965 units, a year - on - year decrease of 2.09% [68].

1. Report Industry Investment Rating - No information regarding the report industry investment rating is provided in the content. 2. Core Viewpoints of the Report - The zinc market is currently in a state of complex supply - demand dynamics. The overseas short - squeeze in the zinc market has ended, and the domestic destocking pace will slow down. In the short term, prices may enter a period of consolidation. In the long run, supply - side contradictions will continue to dominate zinc prices, and the expansion of consumption space will determine the upside potential of prices. With the end of the zinc mine expansion cycle, a tight balance in the zinc mine market may become the norm next year, and zinc prices have the potential to rise. Investors are advised to pay attention to the upper price pressure in the short term and mid - term opportunities to buy on dips [3][5]. 3. Summary by Relevant Catalogs 3.1 Market Review - **Price**: The closing price of SHFE Zinc's main contract last week was 23,275, with a weekly increase of 0.19%. The closing price of the night session yesterday was also 23,275, with a night - session increase of 0.00%. The price of LmeS - Zinc 3 was 3,127, with an increase of 1.31% [6][7]. - **Trading Volume and Open Interest**: The trading volume of SHFE Zinc's main contract last Friday was 154,943 lots, a decrease of 16,575 lots compared to the previous week. The open interest was 86,579 lots, a decrease of 8,618 lots. The trading volume of LmeS - Zinc 3 was 13,418 lots, an increase of 7,474 lots, and the open interest was 228,130 lots, an increase of 1,079 lots [6]. 3.2 Industry Chain Vertical and Horizontal Comparison - **Inventory**: Zinc ore and smelter finished product inventories have declined from high levels, and the visible inventory of zinc ingots has decreased. The inventory of zinc ore, smelter finished products, and zinc ingots has shown a downward trend, while the total global visible zinc inventory has significantly increased [9][36]. - **Profit**: Zinc mine profits are at the forefront of the industry chain, and smelting profits are at a historical median level. Zinc mine enterprise profits have rebounded to a medium - high historical level, smelting profits have rebounded to a historical median level, and galvanized pipe enterprise profits have remained stable at a medium - low level compared to the same period [11][12]. - **Capacity Utilization**: Smelting capacity utilization has declined, and downstream capacity utilization is at a medium - low historical level. Zinc concentrate and refined zinc capacity utilization have declined to a medium level compared to the same period in history. Downstream galvanizing capacity utilization has increased, while die - casting zinc and zinc oxide capacity utilization have shown mixed trends, generally at a medium - low historical level [13][14]. 3.3 Trading Aspects - **Spot**: The spot premiums in Guangdong and Tianjin have fluctuated. Overseas premiums have shown differentiation, with the Singapore premium remaining stable, and the LME CASH - 3M has declined from a high level and changed to a Contango structure [17][18]. - **Spread**: The Contango structure of SHFE Zinc has flattened [20]. - **Inventory**: There has been a slight reduction in inventory this week, and the open interest - to - inventory ratio has decreased. LME inventory is mainly concentrated in the Singapore region, with a significant increase in total LME inventory. The proportion of cancelled warrants has dropped significantly to a historical low level. The bonded - area inventory has remained unchanged this week, and the total global visible zinc inventory has significantly increased [28][34][36]. - **Open Interest and Trading Volume**: The domestic open interest is at a medium level compared to the same period in history [37]. 3.4 Supply - **Zinc Concentrate**: Zinc concentrate imports have rebounded significantly, domestic zinc ore production has decreased, the processing fee for imported ore has decreased this week, and the processing fee for domestic ore has decreased significantly. The arrival volume of zinc ore at ports is at a low level, and smelter raw material inventories have increased [40][41]. - **Refined Zinc**: Smelting output has declined and is at a medium level compared to the same period in history. Smelter finished product inventories have increased and are at a high level compared to the same period in history, and zinc alloy production is at a high level [47][48]. - **Recycled Zinc Raw Materials**: Information on recycled zinc raw materials mainly includes the operating rate of 87 independent electric arc furnace steel mills, the average price of galvanized pipe slag in Tianjin, and the daily consumption of scrap steel by 147 steel mills [51][52][53]. 3.5 Demand - **Downstream Processing Materials**: The consumption growth rate of refined zinc is positive. The monthly capacity utilization of downstream industries has slightly increased, mostly at a medium - low level compared to the same period in history. The raw material and finished product inventories of downstream industries show different trends [59][62]. - **End - Users**: The real estate market remains at a low level, and the power grid shows structural growth [76]. 3.6 Overseas Factors - The prices of European natural gas, carbon emissions, and electricity, as well as the profitability of zinc smelters in European countries, are presented, but no specific trends or conclusions are drawn in the summary [77][78][79].

1. Report Industry Investment Rating No information provided in the content. 2. Core View of the Report The fundamentals of zinc are gradually improving, and zinc prices may recover in the future [2]. 3. Summary by Relevant Catalogs 3.1 Fundamentals - **Zinc Concentrate Production**: Overseas, the total production of some overseas mining enterprises from Q1 to Q3 in 2025 was 34.305 million tons, a year - on - year increase of 11.24%. The total production in 2024 was 41.928 million tons, a year - on - year decrease of 4.42%. The production of some overseas mining enterprises in the future is expected to have a total increase of 23.27 million tons in 2026 compared with 2025. Domestically, the total production of some domestic mining enterprises is expected to increase by 20.7 million tons in 2026 compared with 2025 [16][34][35]. - **Refined Zinc Supply and Demand**: - **Global**: In 2025E, the global refined zinc production was 14.05 million tons, and the consumption was 13.9 million tons, with a supply - demand surplus of 150,000 tons. In 2026E, the production is expected to be 14.2 million tons, and the consumption is expected to be 14.109 million tons, with a supply - demand surplus of 91,000 tons [116]. - **Domestic**: In 2025E, China's refined zinc production was 6.852 million tons, and the consumption was 7 million tons, with a supply - demand surplus of 107,000 tons. In 2026E, the production is expected to be 6.93 million tons, and the consumption is expected to be 7.05 million tons, with a supply - demand surplus of 80,000 tons [115]. - **Zinc Smelter Capacity**: - **Domestic**: From 2025 - 2026, the total new capacity of domestic mineral zinc smelters was 1.57 million tons, and the total new capacity of recycled zinc smelters was 501,000 tons. The new capacity in 2025 was 1.146 million tons, and the expected new capacity in 2026 was 1.225 million tons [69]. - **Overseas**: The total production of some overseas zinc smelters is expected to increase by 1.88 million tons in 2026 compared with 2025 [71]. 3.2 Market Demand - **Real Estate**: The report presents data on real - estate development investment, commercial housing transaction area, new construction area, and completion area, but no clear trend analysis is provided [75][76]. - **Infrastructure**: In 2025, from January to November, the cumulative fixed - asset investment in infrastructure construction was 2.2413413 trillion yuan, a year - on - year increase of 0.13%. Among them, the power, heat, gas, and water production and supply industry increased by 10.70%, the transportation, warehousing, and postal industry decreased by 0.10%, and the water conservancy, environment, and public facilities management industry decreased by 6.30% [86]. - **Automobile**: The report shows data on automobile production, new - energy vehicle production, and automobile exports, but no clear trend analysis is provided [94][97][99]. - **White Goods**: In 2025, from January to November, the cumulative production of white goods was 45.78 million units, a year - on - year increase of 0.03%. Among them, the air - conditioner production was 24.5361 million units, a year - on - year increase of 1.60%; the refrigerator production was 9.9342 million units, a year - on - year increase of 1.20%; and the washing - machine production was 11.3097 million units, a year - on - year increase of 6.30% [101]. 3.3 Future Outlook and Strategy Recommendation No specific content on future outlook and strategy recommendation is provided in the part that meets the requirements.

Report Industry Investment Rating - Not provided in the report Core Viewpoints - The market trading theme revolves around the overseas interest - rate cut cycle and the expectation of manufacturing recovery, with a warm risk preference. The fundamental situation is a mix of long and short factors. In the short term, zinc prices are expected to fluctuate strongly supported by macro - bullish sentiment and inventory reduction, but LME inventory accumulation and domestic supply recovery will limit the upside space [3][8][9] Summary by Sections Transaction Data - From December 19th to 26th, the SHFE zinc price rose from 23,065 yuan/ton to 23,170 yuan/ton, an increase of 105 yuan/ton; the LME zinc price rose from 3078 dollars/ton to 3086.5 dollars/ton, an increase of 8.5 dollars/ton. The SHFE - LME ratio rose from 7.49 to 7.51. The SHFE inventory decreased by 3054 tons to 72963 tons, while the LME inventory increased by 6975 tons to 106,875 tons. The social inventory decreased by 0.75 million tons to 11.47 million tons, and the spot premium decreased by 10 yuan/ton to 80 yuan/ton [4] Market Review - Last week, the main contract of SHFE zinc fluctuated narrowly, closing at 23170 yuan/ton with a weekly increase of 0.41%. LME zinc also had a narrow - range fluctuation, closing at 3086.5 dollars/ton with a weekly increase of 0.28%. In the spot market, as the year - end approached, traders sold more goods, and the spot premium decreased. The downstream's purchasing weakened in the second half of the week [5] Macroeconomic Situation - The US GDP in Q3 was stronger than expected, and the initial jobless claims data last week was better than expected, leading the market to slightly increase the expectation of a Fed rate cut in January next year. The domestic central bank's Q4 meeting pointed out to continue implementing a moderately loose monetary policy and strengthen counter - cyclical and cross - cyclical adjustments [3][6][8] Fundamental Analysis - **Supply**: In January 2026, the domestic and foreign zinc concentrate processing fees continued to decline month - on - month, but the SHFE - LME ratio has recovered to open the zinc concentrate import window, and the weekly processing fees have stopped falling. The supply of refined zinc in January 2026 is expected to increase by about 15,000 tons month - on - month, and the supply pressure has a marginal increase [3][8] - **Demand**: The lifting of environmental protection restrictions in the north and project rush in the south supported the increase in the operating rate of galvanizing enterprises. The operating rates of die - casting zinc alloy and zinc oxide enterprises also increased. However, the new round of environmental protection control in the north is approaching, and the enterprises' operations are still under pressure [3][8] Industry News - In January 2026, the average domestic and foreign zinc concentrate processing fees were 1400 yuan/metal ton and 79.04 dollars/dry ton respectively, showing a month - on - month decrease. In November, the zinc concentrate import volume increased year - on - year and month - on - month, the refined zinc import volume decreased year - on - year and month - on - month, and the refined zinc export volume led to a net export of 24,600 tons. GMI will continue to provide loans to Shuka to acquire LEM Mining and Kabwe Zinc Mine [10]

1. Report Industry Investment Rating - Not provided in the document 2. Core View of the Report - The report predicts that Shanghai zinc will fluctuate and adjust, with support at 22,900 yuan/ton and resistance at 23,400 yuan/ton [5]. 3. Summary by Relevant Catalogs 3.1. Weekly Key Points Summary - **Market Review**: This week, the main contract of Shanghai zinc fluctuated strongly, with a weekly increase of 0.46% and an amplitude of 1.78%. As of the end of this week, the closing price of the main contract was 23,170 yuan/ton [5]. - **Market Outlook**: Macroscopically, the US has ended the previous administration's trade investigation on Chinese chips and will not impose additional tariffs on Chinese chips for the next 18 months. Fundamentally, upstream zinc ore imports have declined, and domestic smelters' production is expected to decrease significantly. The export window may close again. On the demand side, the downstream market is gradually entering the off - season, with the real - estate sector dragging down, and the infrastructure and home - appliance sectors weakening, while the automobile and other sectors have some policy - supported highlights. Domestic inventories continue to decline, while LME zinc inventories have increased significantly [5]. 3.2. Futures and Spot Market - **Price and Ratio**: As of December 26, 2025, the closing price of Shanghai zinc was 23,170 yuan/ton, up 105 yuan/ton or 0.46% from December 19, 2025. As of December 24, 2025, the closing price of LME zinc was 3,086.5 US dollars/ton, up 13 US dollars/ton or 0.42% from December 18, 2025. The Shanghai - London ratio has rebounded [10]. - **Net Position and Open Interest**: As of December 26, 2025, the net position of the top 20 in Shanghai zinc was 5,746 lots, an increase of 678 lots from December 19, 2025. The open interest was 200,417 lots, an increase of 6,815 lots or 3.52% from December 19, 2025 [16]. - **Price Spreads**: As of December 26, 2025, the aluminum - zinc futures spread was 765 yuan/ton, a decrease of 115 yuan/ton from December 19, 2025. The lead - zinc futures spread was 5,615 yuan/ton, a decrease of 570 yuan/ton from December 19, 2025 [19]. - **Spot Premiums**: As of December 26, 2025, the spot price of 0 zinc ingots was 23,230 yuan/ton, unchanged from December 19, 2025. The spot premium was 55 yuan/ton, a decrease of 100 yuan/ton from last week. As of December 24, 2025, the LME zinc near - month to 3 - month spread was - 28.26 US dollars/ton, a decrease of 6.69 US dollars/ton from December 17, 2025 [25][26]. - **Inventories**: As of December 24, 2025, LME refined zinc inventories were 106,875 tons, an increase of 9,175 tons or 9.39% from December 17, 2025. As of December 19, 2025, SHFE refined zinc inventories were 76,017 tons, a decrease of 4,560 tons or 5.66% from last week. As of December 25, 2025, domestic refined zinc social inventories were 111,400 tons, a decrease of 7,300 tons or 6.15% from December 18, 2025 [29]. 3.3. Industry Situation - **Upstream**: In October 2025, global zinc ore production was 1.1009 million tons, a month - on - month increase of 1.21% and a year - on - year increase of 4.87%. In November 2025, the import volume of zinc ore concentrates was 519,018.96 tons, a month - on - month increase of 52.31% and a year - on - year increase of 14.06% [35]. - **Supply - Side**: - **Global Supply Gap**: In October 2025, global refined zinc production was 1.2187 million tons, with a year - on - year increase of 108,400 tons or 9.76%. Consumption was 1.2193 million tons, a year - on - year increase of 44,200 tons or 3.76%. The global refined zinc gap was 600 tons, compared to a gap of 64,800 tons in the same period last year. The WBMS reported a global zinc market supply - demand balance of - 35,700 tons in September 2024 [40][41]. - **Production Forecast**: In November 2025, zinc production was 654,000 tons, a year - on - year increase of 13.3%. From January to November 2025, the cumulative zinc output was 6.842 million tons, a year - on - year increase of 9.5%. However, production is expected to decline [44]. - **Export Window**: In November 2025, the import volume of refined zinc was 18,229.93 tons, a year - on - year decrease of 48.15%. The export volume was 42,815.55 tons, a year - on - year increase of 8748.45% [47]. - **Downstream**: - **Galvanized Sheets**: From January to November 2025, the inventory of galvanized sheets (strips) of major domestic enterprises was 942,600 tons, a year - on - year increase of 9.06%. In November 2025, the import volume of galvanized sheets (strips) was 36,700 tons, a year - on - year decrease of 19.91%. The export volume was 317,900 tons, a year - on - year increase of 11% [50][51]. - **Real Estate**: From January to November 2025, the new housing construction area was 534.567 million square meters, a year - on - year decrease of 20.58%. The housing completion area was 394.5393 million square meters, a year - on - year decrease of 17.58%. The funds in place of real - estate development enterprises were 8.514519 trillion yuan, a year - on - year decrease of 11.9%. Personal mortgage loans were 1.1786 trillion yuan, a year - on - year decrease of 15.1% [56][57]. - **Infrastructure**: In November 2025, the real - estate development climate index was 91.9, a decrease of 0.52 from last month and 0.61 from the same period last year. From January to November 2025, infrastructure investment increased by 0.13% year - on - year [62][63]. - **Home Appliances**: In November 2025, the refrigerator production was 9.442 million units, a year - on - year increase of 5.6%. From January to November 2025, the cumulative refrigerator production was 99.342 million units, a year - on - year increase of 1.2%. In November 2025, the air - conditioner production was 15.026 million units, a year - on - year decrease of 23.4%. From January to November 2025, the cumulative air - conditioner production was 245.361 million units, a year - on - year increase of 1.6% [65]. - **Automobiles**: In November 2025, China's automobile sales volume was 3,428,998 units, a year - on - year increase of 3.4%. The automobile production volume was 3,531,579 units, a year - on - year increase of 2.76% [70].

1. Report's Investment Rating for the Industry - No investment rating for the industry is provided in the report. 2. Core Viewpoint of the Report - The zinc market is currently influenced by a mix of bullish and bearish factors, causing the Shanghai zinc price to fluctuate widely. In the short term, the expected reduction in domestic smelter production and the continuous decline in domestic social inventories support the zinc price. However, the weakening consumption and continuous inventory build - up overseas put pressure on the LME zinc price, which in turn affects the Shanghai zinc price. Traders should focus on the start - up of domestic smelters and macro factors [5]. 3. Summary by Relevant Catalogs 3.1 Comprehensive Analysis and Trading Strategy 3.1.1 Trading Logic - **Supply - side**: In the mining sector, domestic zinc concentrate processing fees have stabilized. The import window for zinc concentrate has reopened, and the price difference between imported and domestic zinc concentrates has narrowed, reducing the smelters' enthusiasm for domestic zinc concentrates. The trading volume of imported zinc ore has been light recently. On the smelting side, the reduction in zinc concentrate processing fees and lower zinc prices have shrunk the profits of most domestic smelters, and there is an expected further increase in the reduction of domestic refined zinc production in December [5]. - **Demand - side**: The operating rate of galvanized enterprises has continued to decline, while the operating rates of die - casting and zinc oxide enterprises are acceptable. Domestic refined zinc consumption has gradually weakened as the consumption season approaches [5]. - **Inventory**: As of December 18, the total zinc ingot inventory in seven major regions monitored by SMM was 122,200 tons, a decrease of 6,100 tons from December 11 and 3,500 tons from December 15. The continuous decline in domestic inventories provides some support for the zinc price [5]. 3.1.2 Trading Strategy - **Single - side trading**: The zinc price is expected to fluctuate widely. - **Arbitrage trading**: It is recommended to wait and see [5]. 3.2 Market Data - The report mentions aspects such as spot premiums, basis in major consumption areas, absolute prices, monthly spreads, trading volume, and open interest of Shanghai zinc, as well as social inventories, bonded area inventories, LME inventories, LME cancelled warrant ratios, and LME inventory distribution by region, but no specific numerical analysis is provided [7][13][16][17]. 3.3 Fundamental Data 3.3.1 Zinc Ore Supply - **Global and Domestic Production**: From January to October 2025, global zinc concentrate production was 10.4892 million tons, a year - on - year increase of 737,600 tons or 7.56%. Overseas zinc concentrate production was 7.0222 million tons, a year - on - year increase of 532,600 tons or 8.21%, and Chinese zinc concentrate production was 3.467 million tons, a year - on - year increase of 205,000 tons or 6.28%. In November, domestic zinc concentrate production was 311,400 tons, a month - on - month decrease of 2.86% and a year - on - year increase of 5.24%. It is expected that December production will increase by 2.76% month - on - month to 320,000 tons [28]. - **Raw Material Inventory**: As of November, domestic smelter raw material inventory increased by 0.48 days year - on - year to 20.8 days, but has been decreasing month by month recently. The inventory of zinc concentrates in major domestic ports increased by 12,000 tons month - on - month to 312,000 tons [28][43]. 3.3.2 Zinc Ore Import - **Import Volume**: In October 2025, the import volume of zinc concentrates was 340,900 tons (physical tons), a month - on - month decrease of 32.56% (164,500 physical tons) and a year - on - year increase of 2.97%. From January to October, the cumulative import volume of zinc concentrates was 4.3489 million tons (physical tons), a cumulative year - on - year increase of 36.59%. In November, the import volume is expected to recover [30]. - **Import Source**: In October 2025, the top three import sources were Peru (95,700 physical tons, accounting for 28.1%), Australia (49,800 physical tons, accounting for 14.6%), and Russia (32,400 physical tons, accounting for 9.5%) [30]. 3.3.3 Domestic Ore Supply - Overall, domestic ore supply has decreased, and imported zinc concentrates are expected to decline. It is expected that the supply of domestic zinc concentrates in November may decrease [42]. 3.3.4 Zinc Ore Processing Fees - In December, the monthly processing fee for domestic Zn50 zinc concentrates was 2,000 yuan/ton. On December 19, the weekly processing fee for domestic Zn50 zinc concentrates was 1,600 yuan/metal ton, and the SMM imported zinc concentrate index was adjusted down by 0.43 US dollars/dry ton to 50.13 US dollars/dry ton [47]. 3.3.5 Global Refined Zinc Production - From January to October 2025, global refined zinc production was 11.5147 million tons, a year - on - year increase of 159,500 tons or 1.4%; consumption was 11.3905 million tons, a year - on - year increase of 102,900 tons or 0.91%. There was a cumulative surplus of 124,200 tons. In October, global refined zinc production was 1.2187 million tons, a year - on - year increase of 9.76%, and demand was 1.2193 million tons, a year - on - year increase of 3.76%, with a shortage of 600 tons [51]. 3.3.6 Domestic Refined Zinc Supply - **Smelter Operating Rate**: In November, the operating rate of domestic refined zinc enterprises was 87.1%, a month - on - month decrease of 3.06%. Large - scale enterprises had an operating rate of 91.56%, a month - on - month increase of 0.55%; medium - scale enterprises had an operating rate of 85.83%, a month - on - month decrease of 7.23%; small - scale enterprises had an operating rate of 76.05%, a month - on - month decrease of 4.81% [54]. - **Production Volume**: In November, SMM's domestic refined zinc production was 595,200 tons, a month - on - month decrease of 3.56% and a year - on - year increase of 16.75%. It is expected that December production will be 570,900 tons, a month - on - month decrease of 4.08% and a year - on - year increase of 10.49% [55]. 3.3.7 Zinc Ingot Import and Export - **Import**: In October 2025, the import volume of refined zinc was 18,800 tons, a month - on - month decrease of 16.94% and a year - on - year decrease of 67.39%. From January to October, the cumulative import volume was 277,000 tons, a cumulative year - on - year decrease of 26.63%. - **Export**: In October, the export volume of refined zinc was 8,500 tons, with a net import of 10,300 tons. The export volume is expected to increase in December, which will alleviate the domestic surplus situation to some extent [58][59]. 3.3.8 Downstream Consumption - **Primary Processing**: The operating rate of galvanized enterprises has continued to decline, while the operating rates of die - casting and zinc oxide enterprises are acceptable. The report also mentions the raw material and finished product inventories of primary processing enterprises, but no specific data is provided [5][66][67]. - **End - use Industries**: The report covers real - estate construction data, infrastructure investment, domestic automobile production, and domestic white - goods production, but specific numerical analysis is not provided [73][84][94][97].

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - The zinc price will maintain a wide - range oscillation throughout 2026. The price will be relatively strong in the first half of the year due to the structural shortage of domestic raw materials, and the center of gravity may move slightly downward in the second half as the incremental supply is fully transmitted to zinc ingots [1]. - The global zinc mine is entering an expansion cycle (with an expected increase of 290,000 tons), but the domestic market will still be in a tight - balance state in the first half of the year. Driven by the repair of TC, the smelting output will show a trend of "first decreasing and then increasing", with an expected year - on - year growth of over 4.5% for the whole year, and the supply pressure will gradually shift from the mine end to the ingot end [1]. - Although affected by the real estate industry, at the beginning of the "15th Five - Year Plan", infrastructure (UHV, wind power) and high - end manufacturing (new energy vehicle exports) will significantly increase the zinc consumption density, effectively offsetting the decline in real estate. The actual consumption is expected to maintain positive growth and achieve a soft landing [1]. - The core fluctuation range of the SHFE Shanghai zinc main contract in 2026 is predicted to be between 21,500 - 24,800 yuan/ton, and the LME zinc will fluctuate between 2,750 - 3,350 US dollars/ton. In the first half of the year, the domestic market will be stronger than the overseas market, and the price is likely to rise. In the second half, with the arrival of imported ores, the increase in TC will drive smelters to release production. Coupled with the potential drag from the real estate completion end, supply - demand pressure will gradually emerge, and the price center of gravity may decline under pressure [1]. Summary by Relevant Catalog Chapter 2: Market Review - In the first three quarters of 2025, zinc prices fluctuated widely due to repeated macro - expectations and mismatches in industrial supply - demand rhythms. In Q1, the shortage of mines supported the price increase. In Q2, trade frictions and the strong US dollar led to a significant price correction. In Q3, the supply - demand mismatch between domestic and overseas markets led to a resistance - style upward trend with the overseas market stronger than the domestic one [3]. - In Q4, the structural contradiction in the global zinc market reached an extreme. The market shifted from unilateral gambling to cross - market arbitrage. The large gap between domestic and overseas inventories opened the export profit window for Chinese zinc ingots. The export - driven marginal inventory reduction became the core variable affecting price fluctuations, and the market established a pattern of re - balance through exports [5]. Chapter 3: Supply Side 3.1 Zinc Concentrate - In 2025, global zinc mine supply recovered. The annual output is expected to reach 12.51 million tons, a year - on - year increase of 4.6%. In 2026, the output is expected to continue to grow by 2.27% to 12.61 million tons [12]. - Overseas mine production is growing steadily, driven by the resumption of old capacities and the ramping - up of new mines. Key mining enterprises such as Glencore, Ivanhoe Mines, and Teck Resources have good production performance. In 2026, the global new zinc mine increment is about 290,000 tons, and the market will be in a tight - balance state [14][15]. - The overall cost center of global zinc mines has shifted upward. The 90 - percentile line (about $2,400 - $2,550/ton) is considered a long - term "price bottom". If the zinc price falls below this line, about 10% of high - cost mines will face cash - flow losses and trigger passive production cuts [17]. - In 2025, domestic zinc concentrate supply was sufficient in general, but production was affected by environmental and safety inspections at the end of the year. In 2026, new and resumed projects are expected to contribute about 60,000 tons of output (excluding Huoshaoyun). The Huoshaoyun lead - zinc mine needs attention regarding the commissioning of supporting smelters [22]. 3.2 Smelting End - From 2024 to the first half of 2025, the global zinc smelting industry was in a difficult situation due to the extreme shortage of mine supply. In the second half of 2025, with the supplement of imported ores and the increase in TC, domestic smelters' production willingness was positive. The cumulative zinc ingot output from January to October was 5.686 million tons, a year - on - year increase of 10.1%, and the annual output is expected to be 5.9 million tons, a year - on - year increase of 11.5% [35]. - In 2026, the long - term benchmark TC is expected to rise significantly. Domestic smelting capacity can be released with high elasticity, but the supply pressure is expected to be less than that in 2025 [35]. - For overseas smelters, high and volatile energy costs in Europe are a major risk. Other regions such as South Korea, Japan, and Canada are expected to maintain high and stable operating rates. Globally, the refined zinc output is expected to grow by 3% to 14.12 million tons in 2026, indicating a gradual entry into the inventory accumulation cycle [38]. 3.3 Import and Export and Internal - External Price Ratio - In 2025, the zinc import window was mostly in a deep - loss state, especially in the second half of the year. From January to October, China's cumulative refined zinc imports were 2.77 million tons, a year - on - year decrease of 26.6%. The reason is the difference in the fundamentals of domestic and overseas markets, with overseas smelters having difficulty in restoring production due to high costs [39]. - In the future, the repair of the price ratio may be a prerequisite for the reversal of TC. With the increase in overseas mine supply and the resumption of smelter production, the shortage of LME zinc will be alleviated, the premium will decline, the price structure will turn to Contango, and the SHFE - LME price ratio will rise, narrowing the import loss [40][41]. Chapter 4: Demand Side - In 2026, China's refined zinc consumption is expected to show a slight increase of 0.5% - 1.5%, and the demand side is expected to be more resilient than the market's concerns about the drag from the real estate industry, achieving a soft landing [43]. 4.1 Real Estate - In 2025, real estate indicators such as new construction, construction, and completion areas all declined. In 2026, the real estate market will continue to drag down the zinc market. The new construction area is expected to maintain a negative growth of - 10% to - 15%, and the decline in the completion area is expected to narrow significantly to about - 10%. The direct drag on zinc consumption is expected to be about - 2.3% to - 2.7% [47][48]. 4.2 Infrastructure - In 2026, infrastructure investment will benefit from the "15th Five - Year Plan" and is expected to maintain a year - on - year growth of 6.8%. UHV grid construction will be a major highlight, and the demand for high - quality hot - dip galvanized pipes will increase significantly, making the infrastructure sector a key factor in stabilizing the demand base [50]. 4.3 Automobile - In 2025, the Chinese automobile market grew strongly, especially in terms of exports and new energy vehicle penetration. In 2026, although the new energy vehicle purchase tax will be reduced from full exemption to half exemption, the decline in battery costs and price competition among car companies will offset the impact of the policy. The output of new energy vehicles is expected to grow by 22.0%. The high - growth of automobile exports will reshape the zinc consumption structure, as export - oriented vehicles have a higher demand for zinc [52][53][54]. 4.4 Home Appliances - In 2026, the home appliance sector is expected to show a stable growth in zinc consumption, with an expected growth rate of 2.5% - 3.0%. This is mainly due to policy - driven replacement demand, the lagging dividend of real - estate completion, and the increasing demand for anti - corrosion materials in emerging markets [59][60]. 4.5 Photovoltaic and Emerging Fields - In 2026, although the growth rate of new photovoltaic installations is expected to decline to 18.0%, the absolute increment is still high. The penetration rate of Zn - Al - Mg alloy - coated brackets will further increase, and the expansion of application scenarios will ensure that the photovoltaic sector continues to contribute to zinc consumption [69]. 4.6 Downstream High - Frequency Demand Indicators - Various downstream high - frequency demand indicators such as galvanized sheet coil inventory, production, and zinc downstream consumption index show certain seasonal trends, which reflect the real - time demand situation in the zinc market [75][77]. 4.7 Inventory - In the first half of 2025, the inventory was at a historical low, and in the second half, the social inventory began to accumulate, but the accumulation rate was lower than expected. This is mainly due to stronger - than - expected demand, the integration of zinc alloy smelting capacity, and the opening of the export window. In 2026, factors affecting inventory include the recovery of the internal - external price ratio and the increase in overseas smelter production due to the rise in TC [79]. Chapter 5: Supply - Demand Balance Sheet 5.1 Global Zinc Concentrate Balance - In 2026, the global zinc concentrate supply is expected to be 12.6094 million tons, a year - on - year increase of 2.27%, and the demand is expected to be 12.6342 million tons, a year - on - year increase of 2.59%. The market will be in a tight - balance state [81]. 5.2 Global Refined Zinc Balance - In 2026, the global refined zinc output is expected to be 14.1215 million tons, a year - on - year increase of 3.01%, and the consumption is expected to be 13.9837 million tons, a year - on - year increase of 1.49%. The market will turn from a shortage to a surplus [82]. 5.3 China's Refined Zinc Balance - In 2026, China's refined zinc output is expected to be 7.172 million tons, a year - on - year increase of 4.55%. The net import is expected to decrease by 100%. The apparent consumption is expected to be 7.172 million tons, a year - on - year increase of 0.84%, and the actual consumption is expected to be 7.07 million tons, a year - on - year increase of 1.00%. The supply - demand surplus is expected to decrease by 8.92% [83].

Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - Zinc is relatively balanced around the 23,000 level, waiting for new drivers, with a neutral strength analysis [2]. - Domestic supply is decreasing, and the consumption situation is weak. The overseas squeeze - out market is over, and short - term prices may enter a consolidation phase. In the long run, supply - side contradictions will continue to dominate prices [5]. - The zinc mine expansion cycle is coming to an end. Next year, the increase in global zinc mines is limited, and zinc prices have the potential to rise. Pay attention to opportunities for buying on dips [5]. Summary by Relevant Catalogs 1. Market Review and Data Changes - **Price and Spread** - The closing price of SHFE zinc last week was 23,065, with a weekly decline of 2.29%. The closing price of the night session was 23,070, with a night - session increase of 0.02%. The closing price of LmeS - zinc3 last week was 3,078, with a weekly decline of 1.94% [6]. - The LME zinc cash - to - three - month spread changed from a backwardation to a contango structure, and the SHFE zinc contango structure flattened [17][19]. - **Inventory** - SHFE zinc warehouse receipts decreased by 6,104 tons, and the total inventory decreased by 4,560 tons; the social inventory decreased by 6,000 tons; the LME zinc inventory increased by 37,975 tons; the bonded - area inventory remained unchanged [6]. - Globally, the total visible zinc inventory increased significantly [35]. - **Trading Volume and Open Interest** - The trading volume of SHFE zinc main contract decreased by 125,408 lots, and the open interest decreased by 44,565 lots. The trading volume of LmeS - zinc3 decreased by 9,880 lots, and the open interest increased by 3,962 lots [6]. - The domestic open interest is at the median of the same period in history [36]. 2. Industry Chain Analysis - **Inventory** - Zinc ore and smelter finished - product inventories have declined from high levels, and visible zinc ingot inventories have decreased [8]. - **Profit** - Zinc mine profits are at the forefront of the industry chain, while smelting profits are at historical lows [10]. - Mining enterprise profits have rebounded and are at a medium - to - high level in history; smelting profits have declined and are at a historical low; galvanized pipe enterprise profits are stable and at a medium - to - low level in the same period [11]. - **Operating Rate** - The zinc concentrate and refined zinc operating rates have declined and are at the median of the same period in history. Downstream galvanizing, zinc die - casting, and zinc oxide operating rates have declined and are at a medium - to - low level in history [13]. 3. Supply - side Analysis - **Zinc Concentrate** - Zinc concentrate imports have rebounded significantly, while domestic zinc mine production has decreased [39]. - Imported ore processing fees have decreased, and domestic ore processing fees have decreased significantly [39]. - The arrival volume of zinc ore at ports is at a low level, and smelter raw - material inventories have decreased [40]. - **Refined Zinc** - Smelting output has declined and is at a high level in the same period in history. Smelter finished - product inventories have decreased and are at a high level in the same period in history [46][47]. - Zinc alloy production is at a high level [47]. 4. Demand - side Analysis - **Refined Zinc Consumption** - The consumption growth rate of refined zinc is positive [52]. - **Downstream Industry** - The monthly operating rate of downstream industries has rebounded slightly and is mostly at a medium - to - low level in the same period in history [55]. - The raw - material and finished - product inventories of downstream industries show different trends [58][61]. - **Terminal Demand** - The real - estate market remains at a low level, while the power grid shows structural increments [71]. 5. Overseas Factors - The prices of European natural gas, carbon emissions, and electricity show different trends, which affect the profitability of overseas zinc smelters [74][75][77].