Zinc prices remained rangebound last week. On the fundamental front, domestic zinc concentrate TCs rose on the back of the inflow of imported zinc concentrate and expectations of output cuts at domestic smelters, reducing the dependence on domestic zinc concentrate. But the current zinc prices are low, and the profit at mines is poor. Profit at mines, however, reached a three-year high thanks to higher TCs. Any upward room for TCs will be limited.

In June, domestic smelters basically maintained routine maintenance. With the intermittent reopening of the import window, inflow of imported zinc ingots will accelerate, which will made up for the output reduction at domestic smelters in June.

The recent favourable macroeconomic policies have given little boost to downstream consumption. The growth in operating rates was driven mainly by the production resumption after the Dragon Boat Festival holidays. Spot premiums were weak. Social inventories of zinc ingot increased by around 10,000 mt in June, and the supply is expected to remain in surplus.

SHFE zinc prices are expected to move between 19,500-20,400 yuan/mt this week, and LME zinc is expected to trade between $2,250-2,450/mt.