[Domestic Inventory Continues to Increase, but Zinc Prices Expected to Maintain Some Support at the Bottom] The most-traded SHFE zinc 2510 contract opened at 22,315 yuan/mt. In early trading, SHFE zinc fluctuated around the daily average line, reaching a high of 22,365 yuan/mt. Subsequently, bulls reduced their positions, and SHFE zinc fluctuated downward below the daily average line, touching a low of 22,255 yuan/mt. Toward the end of the session, bears reduced their positions, and SHFE zinc recovered some of its losses, finally closing up at 22,310 yuan/mt, an increase of 5 yuan/mt, or 0.02%. Trading volume decreased to 97,830 lots, and open interest decreased by 5,694 lots to 92,003 lots.

According to SMM, most galvanizing plants in North China adopted measures such as reduced operating rates or short-term shutdowns during this period, directly leading to a significant contraction in domestic zinc slag supply. Amid the supply-demand imbalance, the zinc slag payable indicator recently rose by approximately 2 percentage points. For zinc oxide enterprises, over 60% of production uses zinc slag as raw material. The increase in raw material prices has directly translated into rigid cost pressures, continuously squeezing profit margins. However, in stark contrast to the strong cost-side increases, downstream rubber and ceramic consumer markets have not entered the expected peak season recovery, with overall demand remaining sluggish. The dual pressures of "rising costs and weak demand" have become the core contradiction in the current zinc oxide market.

SMM Analysis：According to SMM data, as of September 12, the weekly average SMM Zn50 TC stood at 3,850 yuan/mt in metal content, down 50 yuan/mt in metal content from August, while the imported zinc concentrate index reached $98.75/dmt. This marks the end of the 10-month upward trend in domestic zinc concentrate TCs, whereas imported zinc concentrate TCs continued to climb. Why did domestic zinc concentrate TCs suddenly reverse course in September? What are the expectations for Q4.....

[SMM Zinc Morning Comment] Last Friday, the most-traded SHFE zinc 2510 contract opened at 22,345 yuan/mt. At the beginning of the session, SHFE zinc fluctuated, then fell to a low of 22,260 yuan/mt as bulls reduced their positions. It subsequently consolidated around the daily average line and finally closed down at 22,300 yuan/mt, dropping 5 yuan/mt, or 0.02%. Trading volume decreased to 40,122 lots, and open interest fell by 2,005 lots to 95,692 lots.

[SMM Morning Meeting Minutes: US Interest Rate Cut Expectations Heat Up, LME Zinc Surges] Last Friday, the LME zinc contract opened at $2,905.5/mt. At the beginning of the session, it briefly dipped to a low of $2,900.5/mt, then fluctuated upward as bulls increased their positions. During the night session, it touched a high of $2,960/mt and finally closed up at $2,956/mt, gaining $51/mt, a rise of 1.76%. Trading volume increased to 14,507 lots, and open interest rose by 1,254 lots to 205,000.

SMM September 12 News: After the environmental protection vehicle and production restrictions ended, premiums and discounts in the Tianjin area remained low, and the Tianjin zinc ingot market performed sluggishly. How will premiums and discounts move going forward?

[SHFE/LME price ratio pulled back to fluctuate around 7.6, zinc ingot import arbitrage window remained closed]: This week, the SHFE/LME price ratio pulled back to fluctuate around 7.6, and the zinc ingot import arbitrage window continued to close. Overseas, US August PPI data fell short of expectations, coupled with a surge in initial jobless claims, both reinforced market expectations for the US Fed to cut interest rates. Meanwhile, LME inventory continued destocking, and LME zinc was strongly supported and continued to rise.

[Interest Rate Cut Expectations Continue to Heat Up, SHFE and LME Zinc Prices' Center Rises] At the beginning of the week, the market continued to digest the US non-farm payrolls data that fell far below expectations, and LME zinc extended last Friday's fluctuating trend; subsequently, affected by ongoing disputes in certain international regions, LME zinc came under pressure and experienced a slight decline...

[Large plants operated normally during the week, operating rates of zinc oxide enterprises rose] The operating rate of zinc oxide producers recorded 57.21% this week, up 2.72 percentage points WoW. Raw material side, zinc prices maintained a fluctuating trend during the week, and most zinc oxide enterprises made just-in-time procurement. Meanwhile, some raw materials were in tight supply in the market, leading to limited availability. Enterprises faced higher procurement costs, and raw material inventory saw a slight decline this week.