Zinc social inventories rose 6,100 mt over weekend

[Galvanising operating conditions] Operating rates of galvanising producers fell significantly, mainly due to the concentrated holidays of the Mid-Autumn Festival and National Day, which markedly reduced effective production time. Demand side, recent orders showed divergence across different segments. Steel tower orders were relatively strong, with some enterprises receiving solid order support and taking fewer days off during the holidays, maintaining a degree of resilience in production. In contrast, other traditional galvanising orders remained weak, with insufficient new orders. Some enterprises had extended holiday breaks, and overall production schedules were notably affected.

[Zinc SHFE/LME Price Ratio] This week, the SHFE/LME zinc price ratio held near 6.8, with the import window for zinc ingot into China remaining closed. Outside China, the US dollar index held up well, and combined with rising oil prices and hawkish remarks from US Fed officials, LME zinc consolidated under pressure. However, the LME Cash-3M backwardation structure persisted, providing some support to prices. In China, end-use consumption was mediocre, and the National Day and Mid-Autumn Festival holiday period was extended. Yet with tight ore supply and low TCs, SHFE zinc also continued to consolidate at highs. Overall, the overseas and domestic markets moved relatively in tandem, and the SHFE/LME zinc price ratio is expected to continue consolidating near 6.8.

[North China Zinc Ingot Market] Spot premiums in Tianjin rose significantly this week, up 50 yuan/mt WoW. As of Thursday this week, domestic mainstream brands were quoted at premiums of 50 yuan/mt to discounts of 70 yuan/mt against the 2611 contract, while high-priced brands were quoted at premiums of around 200 yuan/mt against the 2610 contract. Tianjin was quoted at a discount of around 25 yuan/mt against Shanghai, with the Shanghai-Tianjin price spread narrowing. Zinc prices consolidated this week, but with the holiday approaching, many downstream buyers priced and stockpiled, and gradually picked up goods. Some traders were on holiday toward month-end with fewer shipments, coupled with fewer transport vehicles and rising oil prices, freight costs rose notably. Traders raised their quot