Core Viewpoint - The article discusses the increasing cost pressures and quality control challenges faced by the automotive industry, particularly due to the ongoing price wars among car manufacturers, which are impacting the entire supply chain [3][16]. Group 1: Cost Pressures and Quality Issues - Many automotive manufacturers are experiencing significant cost pressures, leading to various "failure issues" in vehicle components, particularly related to the quality of steel used in production [3][5]. - The production of automotive steel is substantial, with an expected output of 40 million tons in 2024, of which cold-rolled and galvanized steel accounts for approximately 29 million tons [3]. - The shift towards cost-cutting has resulted in hidden costs related to production, quality, and management, exacerbating the challenges faced by manufacturers [3]. Group 2: Procurement Practices - Historically, automotive manufacturers had strict procurement practices, ensuring quality by sourcing materials directly from steel mills. However, many have shifted to allowing suppliers to procure materials independently, leading to quality inconsistencies [7][8]. - The competitive bidding process often prioritizes the lowest price, which can compromise material quality, as suppliers may opt for cheaper, lower-quality steel to win contracts [8][9]. - Instances of suppliers providing false quality assurance documents have been reported, indicating a lack of thorough checks on material quality during the procurement process [9][10]. Group 3: Price Wars and Market Dynamics - The automotive industry has seen a significant price war, with major brands reducing prices to maintain market share, resulting in a sales profit margin of only 4.1% in 2025, the lowest on record [16]. - The trend of requiring suppliers to reduce prices has accelerated, with some manufacturers demanding price cuts of 10% for 2025, reflecting the intense competitive environment [16][17]. - The article highlights a shift towards a "value war" as manufacturers attempt to differentiate themselves, although the pressure to lower prices remains a dominant factor [17]. Group 4: Industry Collaboration and Future Outlook - To address the issues of internal competition and quality, industry leaders suggest enhancing communication between automotive manufacturers and steel suppliers, focusing on collaborative research and development [17][18]. - Proposed solutions include establishing quality supply mechanisms and joint research initiatives to develop lightweight and high-strength materials, moving away from a solely price-driven procurement model [17][18]. - The effectiveness of these collaborative efforts remains to be seen, as the industry grapples with the challenges of maintaining quality while managing costs [18].

1. Report Industry Investment Rating - The report does not explicitly mention the industry investment rating. 2. Core Viewpoints of the Report - The zinc market has fundamental support at the bottom, but risks are still brewing, with a neutral strength - weakness analysis [2]. - In the long - term, supply - side contradictions will continue to dominate prices. The zinc ore is at the end of the expansion cycle, and the zinc ore tight - balance may become the norm. The TC operation center is expected to decline this year, and the zinc price operation center is expected to rise [3]. - Currently, the zinc price has basically priced in previous disturbances. If the tense situation in the Middle East persists, the possibility of the market shifting to recession trading increases, and risks in the non - ferrous sector are still brewing. It is recommended to pay attention to mid - term buying opportunities on dips and mid - term internal - external positive arbitrage opportunities [3]. 3. Summary by Relevant Catalogs 3.1 Market Performance - **Price**: The closing price of SHFE zinc main contract last week was 22,935, with a weekly decline of 4.99%, and the closing price of the night session yesterday was 22,860, with a night - session decline of 0.33%. The LmeS - zinc3 closed at 3056 last week, with a weekly decline of 7.21% [6]. - **Trading Volume and Open Interest**: The trading volume of SHFE zinc main contract last Friday was 159,743, an increase of 73,802 compared with the previous week, and the open interest was 106,130, an increase of 30,939. The trading volume of LmeS - zinc3 was 16,533, an increase of 9,477, and the open interest was 208,190, a decrease of 7,216 [6]. - **Inventory**: SHFE zinc warrant inventory was 102,509, an increase of 16,416; SHFE total zinc inventory was 152,266, an increase of 4,918; social inventory was 266,100, a decrease of 2,700; LME zinc inventory was 117,675, an increase of 19,775; bonded - area inventory was 3,300, unchanged [6]. 3.2 Industry Chain Vertical and Horizontal Comparison - **Inventory**: Zinc ore and smelter finished - product inventories are at high levels, and zinc ingot inventory continues to increase [8]. - **Profit**: Zinc ore profits are at the forefront of the industry chain, while smelting profits are at historical lows. Zinc concentrate enterprise production profits are stable and at historical highs, refining zinc enterprise production profits are stable and at historical lows, and galvanized pipe enterprise profits are rising but at the same - period low [10][11]. - **Operating Rate**: Zinc concentrate and refining zinc operating rates have declined and are at historical lows in the same period. Downstream galvanizing, die - casting zinc, and zinc oxide operating rates have increased but are at medium - low levels in history [12][13]. 3.3 Trading Aspects - **Spot**: Spot premiums have rebounded. Overseas premiums are differentiated this week, with Singapore and Antwerp premiums remaining flat, and LME CASH - 3M rising [16][18]. - **Spread**: The near - end of SHFE zinc has strengthened [21]. - **Inventory**: There was a slight de - stocking this week, and the position - to - inventory ratio has decreased. LME inventory is mainly concentrated in Singapore, LME total inventory has increased, the CASH - 3M is related to LME off - warrant inventory, and the cancellation warrant ratio has decreased to a historical low. Bonded - area inventory remained flat this week, and global zinc visible inventory has rebounded significantly [24][30][32]. - **Futures**: The domestic long - position volume is at the median of the historical same period [33]. 3.4 Supply - **Zinc Concentrate**: Zinc concentrate imports have dropped significantly, domestic zinc ore production is at a high level in the same period, import ore processing fees have decreased this week, and domestic ore processing fees have remained stable. Ore arrival volume is at a medium level, and smelter raw material inventory has rebounded from a low level [36][37]. - **Refined Zinc**: Smelting output has declined and is at the median of the historical same period. Smelter finished - product inventory has rebounded and is at a high level in the same period. Zinc alloy output is at a medium level [38]. - **Imports and Exports**: The refined zinc import profit and loss, import volume, and export volume are presented in the report, and the refined zinc consumption growth rate is positive [40][46]. 3.5 Zinc Demand - **Downstream Processing Materials**: Refined zinc consumption growth rate is positive, downstream monthly operating rates have declined slightly and are mostly at historical lows in the same period. Downstream raw material and finished - product inventories are also presented in the report [46][50]. - **End - Users**: The real estate market is still at a low level, and the power grid shows structural increments [61]. 3.6 Overseas Factors - The prices of European natural gas, carbon, and electricity, as well as the profit and loss of zinc smelters in some European countries, are presented in the report [63][64][66].

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The zinc market is rated as neutral to weak, with unexpected inventory accumulation in China and a slow recovery in downstream consumption [2][3][5] - In the short - term, the fundamentals are under pressure, and the inventory inflection point has not appeared. In the long - term, supply - side contradictions will continue to dominate prices, with the TC operation center expected to decline and the zinc price operation center expected to rise [5] - If the tense situation in the Middle East persists, the possibility of the market shifting to recession trading increases, and risks in the non - ferrous sector are brewing. Attention should be paid to medium - term internal and external positive arbitrage opportunities [5] 3. Summary by Relevant Catalogs 3.1 Market Performance - **Price**: The closing price of SHFE zinc main contract last week was 24,140 yuan, with a weekly decline of 0.49%. The closing price of LmeS - zinc3 was 3,293.5 US dollars, with a weekly decline of 0.89% [6] - **Trading Volume and Open Interest**: The trading volume of SHFE zinc main contract last Friday was 85,941 lots, a decrease of 47,394 lots compared with the previous week. The open interest was 75,191 lots, a decrease of 10,125 lots. The trading volume of LmeS - zinc3 was 9,416 lots, a decrease of 6,833 lots, and the open interest was 216,509 lots, a decrease of 2,689 lots [6] - **Inventory**: SHFE zinc warrant inventory increased by 9,643 tons to 86,093 tons, and the total SHFE zinc inventory increased by 12,427 tons to 147,348 tons. Social inventory increased by 12,500 tons to 268,800 tons. LME zinc inventory increased by 2,925 tons to 97,900 tons, and the bonded area inventory remained unchanged at 3,300 tons [6] 3.2 Industry Chain Vertical and Horizontal Comparison - **Inventory**: Zinc ore and smelter finished product inventories are at a high level, and zinc ingot inventory continues to increase [9] - **Profit**: Zinc ore profits are at the forefront of the industry chain, while smelting profits are at a historical low. Zinc ore enterprise profits are stable and at a historical high, smelting profits are stable and at a historical low, and galvanized pipe enterprise profits are rising but at a low level compared with the same period [11][12] - **Capacity Utilization**: Zinc concentrate and refined zinc capacity utilization rates have declined and are at a low level compared with the same period in history. Downstream galvanizing, die - casting zinc, and zinc oxide capacity utilization rates have increased but are at a medium - low level [13][14] 3.3 Trading Aspects - **Spot**: Spot premiums have declined. Overseas premiums are differentiated, with the Singapore premium remaining flat, the Antwerp premium rising, and the LME CASH - 3M declining [17][19] - **Spread**: The contango structure of SHFE zinc has widened [21] - **Inventory**: There has been a significant inventory accumulation this week, and the ratio of open interest to inventory has decreased. LME inventory is mainly concentrated in Singapore, with a slight increase in total inventory. The注销仓单 ratio has decreased and returned to a historical low level. Bonded area inventory remained unchanged this week, and global visible zinc inventory has increased significantly [24][30][32] - **Futures**: The domestic open interest is at a medium - low level compared with the same period in history [33] 3.4 Supply - **Zinc Concentrate**: Zinc concentrate imports have rebounded significantly, domestic zinc ore production is at a high level compared with the same period, import ore processing fees have decreased this week, and domestic ore processing fees have remained stable. Ore arrival volume is at a medium level, and smelter raw material inventory has rebounded from a low level [36][37] - **Refined Zinc**: Smelting output has declined and is at a medium level compared with the same period in history. Smelter finished product inventory has increased and is at a high level compared with the same period in history. Zinc alloy output is at a medium level [38] - **Imports and Exports**: Refined zinc import volume and export volume data are provided, and refined zinc import profits and losses are also presented [40] - **Recycled Zinc Raw Materials**: Data on the capacity utilization rate of independent electric arc furnace steel mills, the average price of galvanized pipe slag, the average price of secondary zinc oxide, and the daily consumption of scrap steel by steel mills are provided [42] 3.5 Demand - **Refined Zinc Consumption**: The consumption growth rate of refined zinc is positive [46] - **Downstream Capacity Utilization**: The monthly capacity utilization rate of downstream industries has declined slightly and is mostly at a low level compared with the same period in history [50] - **Downstream Raw Material and Finished Product Inventories**: Data on downstream raw material and finished product inventories are provided [52][55] - **Terminal Demand**: The real estate market is still at a low level, and the power grid shows structural increments [61] 3.6 Overseas Factors - Data on European natural gas futures prices, EU carbon quota prices, European electricity prices, and zinc smelter profits and losses in European countries are provided [63][64][66]

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The zinc market is currently in a state where the supply - side contradiction will continue to dominate prices. The zinc ore expansion cycle is at its end, with global zinc ore production growth slowing down. The most relaxed stage of zinc ore supply has passed, and a tight - balance state may become the norm. In the short - term, the fundamentals are under pressure, but downstream demand is gradually recovering. The Middle East tension has increased zinc price volatility, and there may be mid - term internal - external positive arbitrage opportunities [3]. 3. Summary According to Relevant Catalogs 3.1 Market Performance - **Price**: The closing price of SHFE zinc main contract last week was 24,260, with a weekly decline of 1.82%, and the closing price of the night session yesterday was 24,330, with a night - session increase of 0.29%. The closing price of LmeS - zinc3 last week was 3,323, with a weekly increase of 0.45% [6]. - **Trading Volume and Open Interest**: The trading volume of SHFE zinc main contract last Friday was 133,335, an increase of 28,787 compared to the previous week, and the open interest was 85,316, a decrease of 9,558 compared to the previous week. The trading volume of LmeS - zinc3 was 11,823, an increase of 1,481 compared to the previous week, and the open interest was 222,533, a decrease of 3,899 compared to the previous week [6]. - **Inventory**: SHFE zinc warrant inventory was 76,450, an increase of 6,785 compared to the previous week; SHFE total zinc inventory was 134,921, an increase of 8,869 compared to the previous week; social inventory was 256,300, an increase of 36,400 compared to the previous week; LME zinc inventory was 94,975, a decrease of 2,375 compared to the previous week; bonded - area inventory was 3,300, unchanged from the previous week [6]. 3.2 Industry Chain Vertical and Horizontal Comparison - **Inventory**: Zinc ore and smelter finished - product inventories are at a high level, and zinc ingot inventory continues to increase [9]. - **Profit**: Zinc ore mining enterprises' profits are stable and at a historical high, smelting profits are stable but at a historical low, and galvanized pipe enterprises' profits are recovering but at a low level compared to the same period [11][12]. - **Capacity Utilization**: Zinc concentrate capacity utilization has increased and is at a high level compared to the same period in history. Refined zinc capacity utilization has increased and is at a medium level compared to the same period in history. Downstream galvanizing, die - casting zinc, and zinc oxide capacity utilization have increased but are at a medium - low level compared to the same period in history [13][14]. 3.3 Trading Aspects - **Spot**: Spot premiums have declined. Overseas premiums are differentiated, with Singapore and Antwerp premiums remaining flat, and LME CASH - 3M declining [17][19]. - **Spread**: The contango structure of SHFE zinc has widened [22]. - **Inventory**: There has been a significant inventory build - up this week, and the open - interest - to - inventory ratio has decreased. LME inventory is mainly concentrated in Singapore, with total LME inventory continuously decreasing, and the cancelled - warrant ratio has declined to a historical low. Bonded - area inventory remained flat this week, and global visible zinc inventory has significantly increased [26][32][34]. - **Futures**: The domestic open interest is at a medium - high level compared to the same period in history [35]. 3.4 Supply - **Zinc Concentrate**: Zinc concentrate imports have significantly increased, domestic zinc ore production is at a high level compared to the same period, import ore processing fees have decreased this week, and domestic ore processing fees have remained stable. Ore arrivals are at a medium level, and smelter raw - material inventory has rebounded from a low level [38][39]. - **Refined Zinc**: Smelting output has declined and is at a medium level compared to the same period in history. Smelter finished - product inventory has increased and is at a high level compared to the same period in history. Zinc alloy output is at a medium level [40]. - **Imports and Exports**: Refined zinc imports and exports are presented in relevant data, and refined zinc import losses are shown in the data [42]. - **Recycled Zinc Raw Materials**: Data on the capacity utilization of independent electric - arc - furnace steel mills, scrap - steel consumption of steel mills, and the prices of recycled zinc - related raw materials are provided [44][45][46]. 3.5 Zinc Demand - **Consumption**: The growth rate of refined zinc consumption is positive, but the downstream monthly capacity utilization has slightly declined and is mostly at a low level compared to the same period in history [50][54]. - **Downstream Raw - Material and Finished - Product Inventories**: Data on downstream raw - material and finished - product inventories of galvanizing, die - casting zinc, and zinc oxide are provided [56][60][61]. - **Terminal Demand**: The real - estate market remains at a low level, and the power grid shows structural growth [65]. 3.6 Overseas Factors - Data on European natural - gas futures prices, EU carbon - quota contract prices, European electricity prices, and European zinc - smelter profit - and - loss situations are provided [67][68][69][70].

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - The zinc market is currently in a state of neutral to strong. The supply and demand side of zinc is gradually changing, with the supply side expected to become looser, and the demand side slowly recovering after the holiday. In the long - term, supply - side contradictions will continue to dominate prices. The recent escalation of the Middle East situation may boost zinc prices due to market sentiment, but the actual impact on domestic supply is expected to be limited [2][3][5] 3. Summary by Directory 3.1 Market Review - **Price**: The closing price of Shanghai Zinc main contract last week was 24,710, with a weekly increase of 2.13%, and the closing price of the night session yesterday was 24,445, with a night - session decrease of 1.07%. The closing price of LmeS - Zinc 3 last week was 3,308, with a weekly decrease of 2.07% [6] - **Trading Volume and Open Interest**: The trading volume of Shanghai Zinc main contract last Friday was 104,548, an increase of 1,614 compared to the previous week, and the open interest was 94,874, an increase of 55,085. The trading volume of LmeS - Zinc 3 was 9,705, an increase of 3,962 compared to the previous week, and the open interest was 229,485, a decrease of 1,863 [6] - **Basis**: The LME zinc premium changed from - 31.28 to - 18.34, an increase of 12.94; the bonded area zinc premium changed from - 45 to 130, an increase of 175; the Shanghai 0 zinc spot premium changed from - 35 to - 45, a decrease of 10; the Guangdong 0 zinc spot premium changed from - 65 to - 125, a decrease of 60; the Tianjin 0 zinc spot premium changed from - 85 to - 75, an increase of 10 [6] - **Inventory**: Shanghai Zinc warehouse - receipt inventory increased by 23,972 to 69,665; Shanghai Zinc total inventory increased by 39,027 to 126,052; social inventory increased by 59,500 to 219,900; LME zinc inventory decreased by 4,225 to 97,350, and the proportion of cancelled warehouse receipts was 7.50%, a decrease of 3.11% compared to the previous week; the bonded area inventory remained unchanged at 3,300 [6] 3.2 Industry Chain Comparison - **Inventory**: Zinc ore and smelter finished product inventories are at high levels, and zinc ingot inventory continues to increase [8] - **Profit**: Zinc ore profits are in the forefront of the industrial chain, while smelting profits are at historical lows. Mine enterprise profits are stable and at historical highs, smelting profits are stable and at historical lows, and galvanized pipe enterprise profits are rising but at the same - period low [10][11] - **Capacity Utilization**: The zinc concentrate capacity utilization rate is rising and at a high level in the same period of history; the refined zinc capacity utilization rate is rising and at a medium level in the same period of history; the downstream galvanizing, die - casting zinc, and zinc oxide capacity utilization rates are rising but at a medium - to - low level in history [12][13] 3.3 Trading Aspects - **Spot**: The spot premium has declined. Overseas premiums are differentiated this week, with the Singapore premium remaining flat, the Antwerp premium declining, and the LME CASH - 3M rising [16][18] - **Spread**: The C - structure of Shanghai Zinc has flattened [21] - **Inventory**: There was a significant inventory build - up this week, and the open - interest - to - inventory ratio has decreased. LME inventory is mainly concentrated in the Singapore area, the total LME inventory is relatively stable, the CASH - 3M is related to LME off - warrant inventory, and the proportion of cancelled warehouse receipts has dropped significantly to a historical low. The bonded area inventory remained unchanged this week, and the global visible zinc inventory has slightly increased [25][30][32] - **Futures**: The domestic open interest is at a medium - to - high level in the same period of history [33] 3.4 Supply - **Zinc Concentrate**: Zinc concentrate imports have rebounded significantly, domestic zinc ore production is at a high level in the same period, the import ore processing fee has decreased this week, and the domestic ore processing fee has remained stable. The zinc ore arrival volume is at a medium level, and the smelter raw material inventory is at a low level in the same period [36][37] - **Refined Zinc**: Smelting output is rising and at a high level in the same period of history, smelter finished product inventory is rising and at a high level in the same period of history, and zinc alloy output is at a high level [38] - **Imports and Exports**: The refined zinc import volume and export volume data are provided, and the refined zinc import profit and loss situation is also presented [40] - **Recycled Zinc Raw Materials**: Data on the capacity utilization rate of independent electric arc furnace steel mills, scrap steel daily consumption of steel mills, and the prices of plating pipe slag and secondary zinc oxide are provided [42][43][44][45] 3.5 Demand - **Refined Zinc Consumption**: The refined zinc consumption growth rate is positive [48] - **Downstream**: The monthly capacity utilization rate of downstream industries has increased slightly, mostly at a high level in the same period of history. The raw material and finished product inventory data of downstream industries such as galvanizing, die - casting zinc, and zinc oxide are also provided [52][53][56] - **Terminal**: The real estate market is still at a low level, and the power grid shows structural increments. Data on the capacity utilization rate of domestic tires, cement出库量, rubber tire production, project fund availability rate, and real estate and infrastructure investment are provided [61][62] 3.6 Overseas Factors - Data on European natural gas futures prices, EU carbon quota prices, European electricity prices, and European zinc smelter profit and loss are provided [64][65][66][67]

Group 1 - The steel sector in A-shares experienced a strong afternoon rally, with significant interest from investors, leading to multiple stocks hitting their daily limits, including Baodi Mining and others [1] - The overall market sentiment towards the steel industry has improved, reflecting optimism about the sector's future performance [1] Group 2 - Recent supportive policies have been crucial for the steel industry's development, with a comprehensive support system established to ensure stable long-term growth [2] - A joint document from five government departments outlines the steel industry's growth targets, aiming for an average annual increase of about 4% in value added from 2025 to 2026, focusing on capacity regulation, product optimization, high-end upgrades, green transformation, and consumption expansion [3] - Additional supportive measures include incentives for equipment upgrades and a push for green transformation, which are expected to enhance demand for high-end steel products and improve profitability for steel companies [4] Group 3 - Three key areas within the steel industry are expected to benefit from structural opportunities: high-end special steel and alloy materials, green low-carbon transformation, and recovery in downstream demand [5][6] - The demand for high-performance special steel is projected to grow at over 8% annually by 2026, significantly outpacing ordinary steel, driven by manufacturing upgrades and emerging industries [5] - The investment scale for green transformation in the steel industry is expected to exceed 500 billion yuan over the next two years, benefiting related sectors such as environmental governance equipment and energy-saving technology services [6][7] - The recovery of traditional manufacturing sectors like automotive and home appliances, along with the promotion of steel structures in construction and new energy infrastructure, is anticipated to boost demand for various steel products [8]

Group 1 - The domestic zinc prices have declined today, with the Shanghai zinc futures showing a decrease of 250 yuan/ton, closing at 24,450 yuan/ton, a drop of 1.01% [1] - The trading volume for the Shanghai zinc 2603 contract decreased by 40,788 lots, while the open interest fell by 4,676 lots, indicating reduced market activity [1] - The average price for 0 zinc in the domestic market is reported at 24,550 yuan/ton, down by 40 yuan, while 1 zinc averaged 24,460 yuan/ton, also down by 40 yuan [1] Group 2 - Macroeconomic factors show mixed signals from the US economy, with weak employment data but concerns over high inflation and potential hawkish tendencies from the new Federal Reserve chair nominee, impacting risk assets negatively [2] - Global stock markets are weakening, and geopolitical uncertainties are affecting market sentiment, leading to a slowdown in zinc price declines [2] - The Canadian mining company, Ivanhoe Mines, is in discussions to include high-grade zinc concentrate from the Kipushi mine into the US "Project Vault" strategic reserve, which may support zinc prices amid supply disruptions [3] Group 3 - Domestic zinc concentrate processing fees are at low levels, and many galvanizing enterprises are halting production for the Spring Festival, leading to an increase in social inventory and weak market demand [3] - The overall sentiment in the zinc market is influenced by macroeconomic conditions and weak terminal consumption, with expectations of continued range-bound and downward movement in zinc prices [3]

1. Report Industry Investment Rating - Not provided in the document 2. Core Viewpoints of the Report - The current real - world situation of zinc is not weak, and its price is relatively resistant to decline, with a neutral strength - weakness analysis [2]. - In the long - term, supply - side contradictions will continue to dominate zinc prices. The zinc ore expansion cycle is nearing its end, and the growth rate of global zinc ore production is declining. The most abundant phase of zinc ore is over, and a tight balance in zinc ore may become the norm. The TC operation center is expected to decline this year, and the zinc price operation center is expected to rise. In the short - term, zinc prices may be prone to rise and difficult to fall, and after a medium - term correction, there may be buying opportunities [3]. 3. Summary According to Relevant Catalogs 3.1 Market Data - **Price and Volume**: The closing price of SHFE Zinc main contract last week was 25,835, with a weekly increase of 5.08%; the closing price of LME Zinc 3 was 3,370, with a weekly increase of 3.09%. The night - session closing price of SHFE Zinc main contract was 25,775, with a night - session decline of 0.23% [6]. - **Trading Volume and Open Interest**: The trading volume of SHFE Zinc main contract last Friday was 501,463, an increase of 328,176 from the previous week; the open interest was 105,539, a decrease of 14,636 from the previous week. The trading volume of LME Zinc 3 was 14,007, an increase of 4,544 from the previous week; the open interest was 233,157, an increase of 2,991 from the previous week [6]. - **Inventory**: SHFE Zinc warehouse receipts inventory decreased by 1,526 to 28,468; SHFE Zinc total inventory decreased by 7,997 to 65,154; social inventory decreased by 1,600 to 117,200; LME Zinc inventory decreased by 1,500 to 110,000; bonded - area inventory remained unchanged at 3,300 [6]. 3.2 Industry Chain Comparison - **Inventory**: Zinc ore and smelter finished - product inventories increased, while zinc ingot visible inventories remained stable [9]. - **Profit**: Zinc ore profits are at the forefront of the industrial chain, while smelting profits are at a historical low. Mining enterprise profits are rising and at a historical high, smelting profits are falling and at a historical low, and galvanized pipe enterprise profits are falling and at a medium - low level compared to the same period [11][12]. - **Operating Rate**: The smelting operating rate continued to decline, and the downstream operating rate is at a medium - low historical level. Zinc concentrate, refined zinc, galvanizing, die - casting zinc, and zinc oxide operating rates all declined [13][14]. 3.3 Trading Aspects - **Spot**: Spot premiums declined. Overseas premiums showed differentiation this week, with Singapore and Antwerp premiums remaining flat, and LME CASH - 3M rising [17][20]. - **Spread**: The C - structure of SHFE Zinc flattened [22]. - **Inventory**: There was a slight reduction in inventory this week, and the position - to - inventory ratio decreased. LME inventory is mainly concentrated in Singapore, the total LME inventory is relatively stable, the CASH - 3M is related to LME off - warrant inventory, and the cancellation warrant ratio has dropped significantly to a historical low. Bonded - area inventory remained unchanged this week, and the total global visible zinc inventory remained stable [25][30][32]. - **Futures**: The domestic long - position volume is at a medium - high level compared to the same period in history [33]. 3.4 Supply - **Zinc Concentrate**: Zinc concentrate imports rebounded significantly, domestic zinc ore production decreased, import ore processing fees decreased this week, and domestic ore processing fees remained stable. The arrival volume of zinc ore at ports was high, and smelter raw - material inventories increased [36][37]. - **Refined Zinc**: Smelting output declined and is at a medium level compared to the same period in history. Smelter finished - product inventories increased and are at a high level compared to the same period in history. Zinc alloy output is at a high level [44]. - **Recycled Zinc Raw Materials**: Information on the operating rate of 87 independent electric - arc furnace steel mills, prices of plating pipe slag, and other related data are presented [47][48]. 3.5 Demand - **Refined Zinc Consumption**: The consumption growth rate of refined zinc is positive [53]. - **Downstream Operating Rate**: The monthly downstream operating rate increased slightly, and most are at a medium - low level compared to the same period in history [57]. - **Terminal Demand**: The real - estate market remains at a low level, and the power grid shows structural increments [68]. 3.6 Overseas Factors - The prices of European natural gas, carbon emissions, and electricity are presented, as well as the profitability of zinc smelters in Spain, the UK, France, Italy, and Germany [70][71][73].

Industry Overview - The zinc supply side is tightening, with domestic smelting enterprises increasing raw material demand ahead of the holiday, driven by the re-industrialization process in Asia, Africa, and Latin America, leading to a positive fundamental outlook for related industries [1] - The market's focus on zinc is driven by three main factors: the recovery of industrial demand from infrastructure and manufacturing in Asia, Africa, and Latin America; the ongoing tightness in zinc supply evidenced by declining smelting fees; and expectations of limited domestic zinc demand decline supported by fiscal policy [1][2] Related Industries - Non-ferrous metal smelting and rolling processing industry: This midstream sector is closely linked to the zinc industry, with tight zinc concentrate supply pushing up raw material costs for smelting enterprises, creating negotiation space for processing fees [3] - Galvanized products industry: Benefiting from the recovery of manufacturing and infrastructure in Asia, Africa, and Latin America, the demand for overseas galvanized sheet orders is gradually increasing, which is expected to boost domestic galvanized enterprises' export business and production capacity utilization [3] - Non-ferrous metal mining and selection industry: The tight supply situation in zinc mining highlights the advantages of companies with quality zinc reserves, allowing them to withstand raw material price fluctuations and ensure production stability [3] Industry Chain Companies - Chihong Zn & Ge Co., Ltd.: The company specializes in the mining, smelting, deep processing, and sales of zinc, lead, and germanium products, possessing rich zinc resource reserves and a high raw material self-sufficiency rate, while also extending its business into zinc deep processing [4] - Zhongjin Lingnan Nonfemet Company: Engaged in the mining, smelting, deep processing, and financial investment of non-ferrous metals, the company has multiple operational zinc mining projects and stable zinc concentrate production capacity, ensuring raw material supply for smelting [4] - Zhuhai Huajin Zinc Industry Group: Focused on zinc smelting and deep processing, the company boasts advanced zinc smelting technology and a diverse range of zinc products, serving various downstream industries with high product quality and market reputation [4]

1. Report's Industry Investment Rating - No information provided in the report 2. Core Viewpoints of the Report - Last week, the Shanghai zinc futures price fluctuated at a high level, with the macro - focus on the tariff disputes between Europe, America, and Canada over Greenland. The domestic GDP in 2025 met the 5% growth target, with investment and consumption growth slowing in December. The equity market's high enthusiasm drove the commodity market [3][10]. - Fundamentally, the output of Kipushi zinc mine in the Democratic Republic of the Congo increased slightly, while that of Antamina mine decreased. Due to the unstable situation in Iran, the overall overseas zinc ore supply might be lower than expected, and the zinc ore processing fee could not improve significantly, strengthening the support for zinc prices. However, high zinc prices and strong by - product prices repaired smelter profits, leading to increased refined zinc supply and supply pressure [3][10]. - On the demand side, the environmental protection restrictions in Tianjin and Hebei were lifted, and the operating rate of galvanizing enterprises rebounded. But terminal orders were still weak, and many enterprises planned to have an early Spring Festival holiday. The operating rate of some alloy and hardware factories decreased, and the recovery of the zinc oxide operating rate was limited [3][10]. - Overall, the Shanghai zinc market faced a game between long and short factors. The weak pattern of increased supply and weak consumption suppressed zinc prices, but the cost - side support was strengthened. In the short term, the Shanghai zinc price would mainly fluctuate around the macro - level, and it was expected to maintain a high - level consolidation trend. This week, attention should be paid to the Fed's interest - rate meeting and tariff disturbances [3][11] 3. Summary by Relevant Catalogs 3.1 Transaction Data | Contract | 16th Jan | 23rd Jan | Change | Unit | | --- | --- | --- | --- | --- | | SHFE Zinc | 24,750 | 24,585 | - 165 | Yuan/ton | | LME Zinc | 3207.5 | 3269 | 61.5 | US dollars/ton | | Shanghai - London Ratio | 7.72 | 7.52 | - 0.20 | - | | SHFE Inventory | 76,311 | 73,151 | - 3160 | Tons | | LME Inventory | 106,525 | 111,500 | 4975 | Tons | | Social Inventory | 11.92 | 11.88 | 0.04 | Ten thousand tons | | Spot Premium | 50 | 40 | - 10 | Yuan/ton | [4] 3.2 Market Review - The Shanghai zinc futures price first declined and then rebounded. Affected by Trump's plan to impose tariffs on 8 European countries, market risk - aversion increased, and non - ferrous metals were under pressure. After the tariff disturbance eased, the market sentiment recovered, and the zinc price rebounded. The weekly decline was 0.67%. The LME zinc price rebounded, with a weekly increase of 1.87% [5]. - In the spot market, downstream procurement became more cautious as the price rose, and the spot premium first increased and then decreased. As of January 23rd, the LME zinc inventory increased by 4975 tons to 111,500 tons, the SHFE inventory decreased by 3160 tons to 73,151 tons. As of January 22nd, the social inventory was 11.88 million tons [6]. - Macroscopically, the US GDP in Q3 2025 grew at an annualized rate of 4.4%, the core PCE price index in November met expectations, and the number of initial jobless claims last week was lower than expected. Trump reached an agreement framework on Greenland with the NATO Secretary - General, but also made a series of tariff threats. The EU held an emergency summit to discuss counter - measures. In China, the GDP in 2025 met the 5% target, but investment and consumption growth slowed in December [7][8][9] 3.3 Industry News - In February 2026, the average domestic zinc concentrate processing fee was 1400 yuan/metal ton, unchanged from the previous month [12]. - Korea Zinc plans to invest $7.4 billion to expand and renovate the Nyrstar smelter in the US, and it will take 6 - 7 years to process about 600,000 tons of waste containing various metals. The project will start this year and be commercially operational in 2029 [12]. - Teck's zinc concentrate output in 2025 was 565,000 metric tons, and the zinc ingot output of Trail smelter was 229,900 tons. However, the 2026 zinc concentrate output guidance of Antamina mine was lowered [13]. - Variscan is promoting the Novales - Udías zinc project. Pan American Silver's zinc and lead production is expected to increase in 2026 [13]. - From January to November 2025, the global refined zinc market had a supply surplus of 74,000 tons, more than twice that of the same period in 2024 [13]. - In December 2025, the imported zinc concentrate was 462,500 tons, a 10.87% month - on - month decrease and a 1.15% year - on - year increase. The imported refined zinc was 8700 tons, a 51.94% month - on - month decrease. The exported galvanized sheet was 1.3891 million tons, a 16.87% month - on - month increase and a 34.82% year - on - year increase [14]. - The Gediktepe sulfide ore expansion project of ACG Metals is expected to start producing copper and zinc in mid - 2026 [14]. - Kipushi mine produced a record 203,168 tons of zinc concentrate in 2025, and the 2026 output guidance is 240,000 - 290,000 tons [14] 3.4 Related Charts - The report provides 14 charts, including price trends of Shanghai zinc and LME zinc, internal and external price ratios, spot premiums, inventory levels, zinc ore processing fees, and downstream enterprise operating rates [16][17][18]