There is still support beneath zinc prices. It is expected that zinc futures prices will fluctuate upward and hold up well during the day. [[Institution's Comment]]

On Tuesday, the most-traded SHFE zinc ZN2506 contract fluctuated rangebound during the day and traded sideways at night, while LME zinc prices fluctuated. Spot market: The mainstream transaction prices for 0# zinc in Shanghai were concentrated in the range of 22,780-22,975 yuan/mt, with a premium of 210-220 yuan/mt against the 2505 contract. During the holiday, arrivals in Shanghai were limited, and traders were reluctant to sell. However, downstream companies still had raw material inventories and mainly engaged in just-in-time procurement, resulting in sluggish spot transactions. SMM: As of May 6, the total zinc ingot inventory was 84,100 mt, a decrease of 1,800 mt from April 28 and an increase of 7,100 mt from April 30, indicating a buildup in domestic inventory. Glencore's owned zinc production in Q1 2025 was 213,600 mt, 4% higher than in Q1 2024. The company's owned zinc production guidance for 2025 is 930,000-990,000 mt. Volcan: In Q1 2025, the total metal production of zinc concentrates was 57,400 mt, down 10% QoQ and up 14% YoY. The company's zinc concentrate production guidance for 2025 is 250,000-255,000 mt.

Overall, China and the US are set to hold high-level economic and trade talks, while the People's Bank of China, the China Securities Regulatory Commission, and other authorities will introduce the "package of financial policies to support market stability and expectations". The macro sentiment is expected to further improve, which is likely to boost zinc prices. From a fundamental perspective, social inventory is expected to increase slightly after the holiday as anticipated, but absolute inventory remains at a low level, providing underlying support. It is expected that zinc futures prices will fluctuate upward during the day. Additionally, as the delivery date approaches, the open interest ratio of the front-month contract remains relatively high, and attention should be paid to liquidity pressure.