Price Trends

According to monitoring by the SunSirs Commodity Market Analysis System, as of May 29, the price of #0 zinc stood at 24,842 RMB/ton—an increase from the price of 24,814 RMB/ton recorded on May 25, representing a rise of 0.11%.

Supply Side

Tightness at the mine end provides strong support. Processing fees continue to decline; domestic zinc concentrate TCs (Treatment Charges) fell week-on-week to 550 RMB/ton, while quotes for imported concentrates ranged from -70 to -60 USD/ton. Smelters are facing widening losses, leading to expectations of maintenance-related production cuts. Disruptions to overseas supply—stemming from factors such as an explosion at a zinc plant in Kazakhstan and changes in mining policies in Peru—have resulted in a tightening of the global zinc concentrate supply. Domestic production remains constrained; the scarcity of raw materials and the prevailing low-TC environment limit the scope for increasing zinc ingot output, with production volume in May projected to contract on a month-over-month basis.

However, the short-term spot supply of refined zinc remains relatively ample. This week, smelters implemented only marginal production cuts, and no concentrated maintenance activities were observed; consequently, the contraction in supply has not yet translated into a significant drawdown in spot inventories. At present, market support is primarily manifesting at the level of sentiment and expectations.

Demand Side

Marginal signs of recovery emerge amidst the off-season. Characteristics of the traditional off-season are evident: operating rates for galvanizing, die-casting, and zinc oxide production have all declined, while demand from the infrastructure and real estate sectors remains sluggish. Structural Bright Spots: Data indicates a marginal rebound in orders for the domestic galvanizing industry and steel structure enterprises, accompanied by increased purchasing enthusiasm among downstream consumers. Marginal Improvement in Exports: Following adjustments in the Shanghai-London price ratio, the export window has opened up slightly, thereby alleviating domestic inventory pressure.

Market outlook

Last week, zinc prices exhibited a volatile yet upward-leaning trend, driven by the interplay between strong support from the mining sector and downward pressure from the seasonal lull in demand. Zinc prices are expected to maintain this pattern of range-bound fluctuation with an upward bias.

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