I. SunSirs Zinc Benchmark Price

On July 6, the SunSirs zinc benchmark price stood at 24,297.00 RMB/ton, marking a 0.90% increase from the 24,080 RMB/ton recorded at the beginning of July. The price remained flat for the day with no intraday fluctuation, and overall, the price level for the year has remained within a medium-to-high range. II. Mainstream Domestic Spot Price Quotes

1. Yangtze River Composite Spot Prices

0# Zinc: Range 24,390–24,490 RMB/ton; average price RMB 24,440; daily increase of 110 RMB/ton

1# Zinc: Range 24,300–24,400 RMB/ton; average price RMB 24,350; daily increase of 110 RMB/ton

2. Guangdong Regional Spot Prices

0# Zinc: Range 24,110–24,410 RMB/ton; average price RMB 24,260; daily increase of 100 RMB/ton

1# Zinc: Range 24,040–24,340 RMB/ton; average price RMB 24,190; daily increase of 100 RMB/ton

3. Mainstream Market Spot Price Ranges

Market-circulating spot: 0# Zinc 24,380–24,490 RMB/ton; 1# Zinc 24,310–24,400 RMB/ton

4. Spot Price Basis (vs. SHFE Zinc Contracts)

Vs. SHFE Zinc 2607 contract: 0# Zinc ranges from a discount of 80 RMB/ton to a premium of 30 RMB/ton; 1# Zinc trades at a discount of 150–60 RMB/ton

Vs. SHFE Zinc 2608 (main) contract: 0# Zinc ranges from a discount of 100 RMB/ton to a premium of 10 RMB/ton; 1# Zinc trades at a discount of 170–80 RMB/ton

III. Spot Market Trading Performance

Spot prices continued to rise, and holders showed a strong willingness to sell at higher levels; downstream end-users limited purchases to immediate needs, maintaining a cautious wait-and-see attitude. V. Market Drivers (Macro + Industry + Inventory)

(I) Macro Factors Supporting Zinc Price Valuation

US non-farm payroll data fell short of expectations, cooling market expectations for a Federal Reserve rate hike: the probability of a hike before the end of September dropped from 59.4% to 53.2%, easing valuation pressure on non-interest-bearing zinc; dovish remarks from Fed officials capped the US dollar's upside.

Normalization of geopolitical shipping routes and a pullback in oil prices eased imported inflation; however, with rate-cut expectations slowing, the US dollar has fluctuated at high levels with limited upside potential.

Domestic policy support: New vehicle and vessel tax policies favor long-term demand for new energy vehicles; the "15th Five-Year Plan" drives the elimination of outdated zinc smelting capacity, while urban renewal and underground utility network upgrades continue to fuel steady demand for galvanized anti-corrosion materials.

(II) Supply Contraction in the Industry: A Key Bullish Factor

Global mining shortage: The ILZSG revised its 2026 outlook for the global zinc market from a surplus to a deficit of 19,000 tons; a combined 600,000 tons of capacity at major overseas smelters is constrained by raw material shortages.

Domestic smelting production cuts materialize: 16 major smelters plan to reduce zinc concentrate consumption by 600,000–1,000,000 tons, with a projected further reduction of 13,000 tons in refined zinc output for July; domestic refined zinc production fell significantly month-on-month in June, and maintenance work alongside cost-driven losses will further suppress output in July.

Raw material cost pressure: Treatment charges (TCs) for both domestic and imported zinc concentrates have turned negative; smelters continue to incur losses, fueling expectations of coordinated production cuts.

(III) Divergent Demand: Infrastructure Offsets Traditional Off-Season Slump

Bearish factors: High summer temperatures and heavy rainfall restrict outdoor construction; a sluggish real estate sector drags down operating rates in the traditional galvanizing industry; downstream finished product inventories continue to accumulate, and corporate purchasing remains cautious.

Bullish factors: UHV (Ultra-High Voltage) and computing power infrastructure provide demand resilience; galvanized sheet exports rose 8.36% year-on-year in May, offsetting domestic off-season pressure; operating rates for die-casting and zinc oxide sectors have seen a slight recovery. (IV) Divergent inventory trends; limited upside potential

Bullish factors (inventory drawdown): LME zinc inventories have retreated to 118,600 tons; SHFE zinc social inventories have declined for three consecutive weeks, dropping by 3,451 tons week-on-week to 151,276 tons for the week of July 3.

Bearish factors (constraints): Absolute levels of SHFE zinc social inventories remain at a four-year high, limiting the scope for a significant rebound.

VI. Summary of short-term market outlook

Easing macro-level pressure regarding interest rate hikes and expectations of production cuts by domestic smelters are supporting a trend of fluctuating strength in spot zinc prices; however, high inventory levels are capping the extent of the rebound. The market anticipates a trading range of 24,200–24,700 RMB/ton for the next trading day.

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