Report Industry Investment Rating - Not provided in the content. Report's Core View - The report expects Shanghai zinc to undergo a strong adjustment, with a focus on the range of 24,500 - 25,500 yuan/ton [3][4]. Summary by Relevant Catalog Futures Market - The closing price of the Shanghai zinc main contract is 24,725 yuan/ton, with a daily increase of 140 yuan; the 02 - 03 month contract spread is -80 yuan/ton, down 20 yuan [3]. - The LME three - month zinc quotation is $3,269/ton, up $58; the total open interest of Shanghai zinc is 234,796 lots, an increase of 11,768 lots [3]. - The net open interest of the top 20 in Shanghai zinc is 4,706 lots, an increase of 5,429 lots; the Shanghai zinc warehouse receipts are 0 tons, unchanged [3]. - The SHFE inventory is 73,151 tons (weekly), a decrease of 3,160 tons; the LME inventory is 111,500 tons (daily), a decrease of 200 tons [3]. 现货市场 - The spot price of 0 zinc on Shanghai Non - Ferrous Metals Network is 24,680 yuan/ton, up 60 yuan; the spot price of 1 zinc in the Yangtze River Non - Ferrous Metals Market is 24,960 yuan/ton, up 70 yuan [3]. - The basis of the ZN main contract is -45 yuan/ton, down 80 yuan; the LME zinc cash - to - 3 - month spread is -$32.62/ton, up $4.04 [3]. - The ex - factory price of 50% zinc concentrate in Kunming is 21,480 yuan/ton, up 220 yuan; the price of 85% - 86% crushed zinc in Shanghai is 16,800 yuan/ton, unchanged [3]. Upstream Situation - The WBMS zinc supply - demand balance is -35,700 tons (monthly), a decrease of 14,700 tons; the ILZSG zinc supply - demand balance is -7,700 tons (monthly), a decrease of 4,900 tons [3]. - The ILZSG global zinc mine production in the current month is 1.0627 million tons, a decrease of 11,900 tons; the domestic refined zinc production is 675,000 tons, an increase of 21,000 tons [3]. - The zinc ore import volume is 462,600 tons (monthly), a decrease of 53,900 tons [3]. Industry Situation - The refined zinc import volume is 8,760.85 tons (monthly), a decrease of 9,469.07 tons; the refined zinc export volume is 27,266.66 tons (monthly), a decrease of 15,548.89 tons [3]. - The social inventory of zinc is 112,200 tons (weekly), an increase of 5,800 tons [3]. Downstream Situation - The monthly output of galvanized sheets is 2.36 million tons, an increase of 20,000 tons; the sales volume of galvanized sheets is 2.36 million tons, a decrease of 60,000 tons [3]. - The monthly new housing construction area is 587.6996 million square meters, an increase of 53.1326 million square meters; the housing completion area is 603.4813 million square meters, an increase of 208.942 million square meters [3]. - The monthly automobile production is 3.4115 million vehicles, a decrease of 107,500 vehicles; the monthly air - conditioner production is 21.6289 million units, an increase of 6.6029 million units [3]. Option Market - The implied volatility of at - the - money call options for zinc is 27.84% (daily), an increase of 1 percentage point; the implied volatility of at - the - money put options for zinc is 27.84% (daily), an increase of 1 percentage point [3]. - The 20 - day historical volatility of at - the - money zinc options is 23.71% (daily), an increase of 0.08 percentage points; the 60 - day historical volatility is 13.75% (daily), an increase of 0.03 percentage points [3]. Industry News - In January, the US S&P Global Manufacturing and Services PMIs both expanded but were slightly lower than expected. The eurozone's January manufacturing PMI unexpectedly rose to 49.4, with Germany's contraction slowing and France reaching a 47 - month high [3]. - The EU announced a six - month suspension of retaliatory tariffs against the US. Trump demanded full military liberalization in Greenland and claimed the US would obtain "sovereignty" over the area of the US military base in Greenland [3]. - The first tri - party talks between Russia, the US, and Ukraine since the Russia - Ukraine conflict were held in the UAE. Zelensky and the US presidential envoy said the talks were "constructive", with progress on military issues but no consensus on territorial issues [3]. View Summary - The upstream zinc ore import volume is at a high level, but domestic zinc mines reduce production at the end of the year. Domestic smelters' competition for domestic ore procurement has increased, and processing fees at home and abroad have dropped significantly, squeezing domestic smelter profits and limiting future production [3]. - Recently, the LME zinc price has corrected, the Shanghai - LME ratio has risen, and there is a possibility that the export window will close again [3]. - 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 policy support in the automotive and other sectors brings some bright spots [3]. - Downstream markets mainly purchase on - demand at low prices. Recently, the zinc price has fallen, downstream procurement has improved, domestic inventory has decreased, LME zinc inventory has remained stable, and the spot premium has remained low [3]. - Technically, the open interest has increased and the price has rebounded, with a warming of the bullish sentiment [3].

Group 1 - In March 2024, strong expectations for a Federal Reserve interest rate cut in June and favorable domestic policy expectations led to a rise in zinc prices, with the main contract reaching a two-year high of 25,365 yuan/ton [1] - By the second quarter of 2024, the trading logic shifted from interest rate cuts to concerns about secondary inflation in Europe and the U.S., causing further increases in zinc prices [1] - The volatility in zinc prices significantly increased operational risks for companies, making futures hedging essential [1] Group 2 - As of the end of March 2024, despite a rapid increase in zinc prices, downstream demand did not improve significantly, leading to a continuous accumulation of social inventory [2] - From July 2024, the spot premium in South China began to rise, peaking at 240 yuan/ton in mid-September before falling back to 15 yuan/ton [2] - The fluctuation of basis affects the effectiveness of futures hedging, making it crucial for companies to determine the basis accurately [2] Group 3 - In 2023, several overseas mines faced production halts, exacerbating the tight supply of zinc concentrate and leading to a decline in processing fees [3] - The supply issues for zinc concentrate worsened in 2024, resulting in a significant reduction in smelting profits and subsequent production cuts by smelters [3] Group 4 - A supply chain management company established in April 2023 focuses on zinc concentrate and zinc ingot procurement and sales, facing challenges due to price volatility [6] - The company engages in high-frequency trading to improve capital turnover and mitigate risks associated with price fluctuations [6] Group 5 - A futures company developed a hedging strategy for the supply chain company, prioritizing spot purchases and short futures when the basis is negative, and pre-selling spot and long futures when the basis is positive [7] - This strategy effectively hedges against single-sided risks in spot trading while capturing basis profits [7] Group 6 - On October 14, 2024, the supply chain company purchased 30 tons of spot zinc at an average price of 24,953 yuan/ton and sold futures at an average price of 25,250 yuan/ton, resulting in a total profit of 4,560 yuan [8] - On October 28, 2024, the company pre-sold 30 tons of zinc ingots at an average price of 24,860 yuan/ton and established long futures, achieving a total profit of 11,010 yuan [8] Group 7 - The case study illustrates that companies should not mechanically follow procurement and sales plans but should anticipate spot premiums or basis changes to enhance hedging effectiveness and increase trade profits [9]

1. Report Industry Investment Rating - Unilateral: Cautiously bearish [4] - Arbitrage: Neutral [4] 2. Core View of the Report - Downstream buyers are reluctant to buy at high prices, mainly consuming inventory, leading to poor spot market transactions and a further decline in spot premiums [3] - The TC of domestic zinc ore remains stable, the import window for zinc ore is closed, domestic ore has an advantage over imported ore, and the TC of imported ore in the third - quarter overseas continues to rise [3] - Smelters' raw material inventory is still sufficient, and the upward trend of the ore end remains unchanged [3] - Smelting profits remain stable, and the long - term high - growth supply expectation remains unchanged [3] - Consumption performance is unexpectedly strong, the zinc alloy operating rate is still increasing, and the social inventory of zinc ingots has not shown a trend of accumulation, possibly due to the zinc alloy reservoir effect [3] - In the short term, be vigilant about energy disturbances caused by the Middle East crisis [3] 3. Summary According to Related Catalogs Important Data - **Spot**: The LME zinc spot premium is -$30.04/ton. SMM Shanghai zinc spot price rose by 190 yuan/ton to 22,200 yuan/ton, and the spot premium fell by 25 yuan/ton to 155 yuan/ton. SMM Guangdong zinc spot price rose by 170 yuan/ton to 22,190 yuan/ton, and the spot premium fell by 45 yuan/ton to 145 yuan/ton. SMM Tianjin zinc spot price rose by 180 yuan/ton to 22,210 yuan/ton, and the spot premium fell by 35 yuan/ton to 165 yuan/ton [1] - **Futures**: On June 18, 2025, the main SHFE zinc contract opened at 21,885 yuan/ton and closed at 22,060 yuan/ton, up 185 yuan/ton from the previous trading day. The trading volume was 123,695 lots, a decrease of 694 lots from the previous trading day, and the position was 97,228 lots, a decrease of 8,440 lots from the previous trading day. The highest price was 22,130 yuan/ton, and the lowest was 21,825 yuan/ton [1] - **Inventory**: As of June 16, 2025, the total inventory of zinc ingots in seven regions monitored by SMM was 78,100 tons, a decrease of 3,600 tons compared with the same period last week. As of June 18, 2025, the LME zinc inventory was 128,250 tons, a decrease of 625 tons from the previous trading day [2] Market Analysis - **Spot Market**: Downstream buyers are reluctant to buy at high prices, mainly consuming inventory, resulting in poor spot market transactions and a further decline in spot premiums [3] - **Cost**: The TC of domestic zinc ore remains stable, the import window for zinc ore is closed, domestic ore has an advantage over imported ore, and the TC of imported ore in the third - quarter overseas continues to rise [3] - **Supply**: Smelting profits remain stable, and the long - term high - growth supply expectation remains unchanged [3] - **Consumption**: Consumption performance is unexpectedly strong, the zinc alloy operating rate is still increasing, and the social inventory of zinc ingots has not shown a trend of accumulation, possibly due to the zinc alloy reservoir effect [3] - **Risk**: In the short term, be vigilant about energy disturbances caused by the Middle East crisis [3]