The zinc market is currently characterized by significant supply-side constraints, weak demand, and divergent inventory trends between domestic and international markets. Zinc concentrate treatment charges have fallen to historic lows, placing persistent pressure on smelting profit margins; this, combined with tightening overseas spot supplies, provides solid support for zinc prices. Conversely, domestic downstream industries have entered a seasonal lull, resulting in lackluster purchasing enthusiasm and limiting the potential for further price increases. This report provides a comprehensive analysis of the current zinc market—considering regional quotes, production and inventory data, import/export figures, and supply chain dynamics—and forecasts future market trends.
I. Domestic Regional Spot Prices (as of June 9)
As of June 9, the SunSirs zinc benchmark price stood at 24,660 RMB/ton, showing minor short-term fluctuations while generally remaining within a high price range. Regional performance regarding basis spreads and transaction prices varied. In Shanghai—a key trading hub—spot quotes were relatively weak, trading primarily at a discount to the benchmark, with average transaction prices hovering close to the benchmark level. The Tianjin market saw deeper spot discounts, reflecting relatively ample circulating supply. In the South China (Guangdong) region, spot discounts narrowed, and trading activity improved compared to the previous period. Inter-regional price differentials remained within a reasonable range, and the pace of cross-regional stock movement was steady. Overall acceptance of high spot prices was limited; downstream buyers focused on sporadic, essential purchases rather than large-scale stockpiling.
II. Domestic Production, Inventory, and Supply Status
The core issue on the supply side is the shortage of zinc concentrate. Domestic treatment charges have dropped to extremely low levels, shifting the bulk of the profit margin to the mining sector and severely squeezing smelter profitability. Faced with margin pressure, some smelters have reduced production willingness, leading to expectations of periodic output cuts and sluggish growth in domestic refined zinc production. Meanwhile, zinc concentrate output at some domestic mines has been constrained by factors such as safety inspections and expiring permits, further exacerbating the raw material shortage.
Inventory levels show a divergence between domestic and international markets. Domestic zinc ingot inventories remain at relatively high levels; while there has been a slight recent decline, absolute inventory volumes still exceed those of the same period in previous years, exerting downward pressure on spot prices. Conversely, visible overseas inventories continue to decline, and the proportion of cancelled warrants has risen, highlighting a shortage of deliverable zinc abroad. Port inventories of zinc concentrate and ingots remain stable with orderly cargo flow; there are no signs of widespread backlogs or supply disruptions, and no global shortage has emerged, though supplies are tight in specific overseas circulation channels.
III. Domestic and Overseas Demand Situation
Domestic downstream sectors remain generally sluggish. Operating rates in key consumption areas—such as galvanizing, die-casting, and zinc alloys—have fallen short of expectations. With end-user manufacturing and infrastructure-related industries entering the traditional off-season, enterprises are purchasing on an as-needed basis and replenishing raw material stocks slowly, making it difficult to generate sustained demand-side momentum. Overseas, industrial demand in Europe and the US remains steady, and essential demand for zinc ingots is stable; combined with low overseas inventory levels, this provides support for international zinc prices. Overall, lackluster demand is the primary factor constraining significant price increases; the global market reflects a "weak balance" characterized by tight supply and tepid demand, without widespread shortages.
IV. Customs Import and Export Data for Zinc Products (April 2026)
In April 2026, the import and export patterns for domestic zinc-related products remained consistent with established trends. Zinc concentrate imports saw a slight year-on-year decline, driven by a contraction in global supply and limited output growth from overseas mines; these factors, compounded by international logistics and regional policy impacts, reduced the volume of overseas cargo arriving at ports. Refined zinc imports remained unprofitable, with the price spread between domestic and international markets keeping the import window closed, resulting in a year-on-year drop in import volumes. Exports of deeply processed products, such as zinc materials and alloys, remained stable, supported by steady overseas industrial demand. Cumulative data for January–April indicates that domestic reliance on imported zinc raw materials remains high; fluctuations in overseas mine supply directly impact domestic smelting operations, and the import-export landscape further confirms the industry-wide shortage of global zinc concentrate. V. Analysis of Price Linkage Between Upstream and Downstream Products
Upstream zinc concentrate supplies remain tight, keeping ore prices firm while treatment charges (TCs) continue to decline; this establishes a cost-based floor for refined zinc prices, driving smelters—facing pressure from losses—to strongly resist price drops. Meanwhile, the price of sulfuric acid, a smelting by-product, continues to fluctuate at high levels, further squeezing overall smelting margins and intensifying production-side pressure. Midstream refined zinc prices fluctuate in tandem with raw material costs, yet the price spread between refined zinc and zinc scrap continues to narrow; with limited supplies of recycled zinc feedstock, the market remains dominated by primary zinc. Downstream products—such as galvanized sheet, zinc alloys, and die-castings—face sluggish end-user demand, making it difficult for their prices to rise in step with raw materials and hindering the transmission of costs down the value chain. Consequently, downstream enterprises are responding to high raw material costs by curtailing operations and cutting expenses, resulting in a marked divergence in profitability between upstream and downstream sectors.
VI. Outlook and Forecast
In the short term, the tight supply of zinc concentrate is unlikely to ease quickly, and expectations of production cuts by smelters persist. Coupled with low overseas inventories and strong support from international markets, zinc spot prices are expected to fluctuate at high levels, with limited room for movement in either direction. High domestic inventories and off-season demand will continue to cap price gains, reflecting an intense tug-of-war between bullish and bearish market forces.
Should smelters implement widespread production cuts due to sustained losses, the volume of circulating stock would decrease and the supply-demand balance would tighten, providing upward momentum for zinc prices. Conversely, if zinc concentrate treatment charges recover and smelting operations ramp up—while the downstream off-season persists—prices would come under pressure and weaken. Meanwhile, the overseas macroeconomic environment and fluctuations in overseas inventories will continue to influence the price linkage between domestic and international markets.
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