Zinc Ingot Long-Term Contract Prices in 2025 from the Perspective of Supply-Demand Pattern [SMM Analysis]

As the new year approaches, the execution of 2025 long-term contracts is expected to begin. The market is paying close attention to the signing of long-term contracts by zinc smelters for next year.

From the perspective of enterprise signing, the 2025 long-term contract prices are significantly higher than last year, especially for ex-works long-term contract prices. Overall, prices increased by 10-80 yuan/mt. This is mainly because, based on the annual average spot premium of 32 yuan/mt in 2024 as assessed by SMM, the ex-works long-term contract prices signed by traders, after deducting freight costs, generally offer a certain profit margin. Traders are actively signing ex-works prices, and smelters also see profit potential. As a result, next year's annual long-term contract prices have been adjusted upward to varying degrees.

From the perspective of next year's supply-demand structure, as the issue of ore shortages gradually eases, the previously reduced capacity and new capacity of smelters will be gradually released. SMM roughly estimates that smelter production in 2025 may increase by more than 200,000 mt YoY, and the supply-side shortage issue will gradually be alleviated. On the consumption side, domestic favourable macro policies continue, with accommodative fiscal and monetary policies already set. Meanwhile, under the "stabilizing the property market" policy, the real estate sector has stopped declining and stabilized. As a major consumption field for zinc, attention should be paid to the actual release of infrastructure demand. If the consumption growth rate can match the supply increase, the overall pressure on the spot market will be moderate. Otherwise, the likelihood of spot cargo being transferred to delivery warehouses will increase significantly.