Fundamentally, in the logic of ore shortages, the procurement frequency of smelters increased amid low inventory. In May, China’s zinc concentrate imports fell to 266,700 mt, and zinc concentrate TCs continued to decline. This has led to an increase in smelter production cuts. According to the SMM survey, starting in July, smelters such as Western Mining, Zhenxing Zinc Industry, Zhongse Zinc, Jinli, and Xing'an Copper-Zinc Smelter will undergo maintenance, with an expected impact of over 25,000 mt in July. On the import side, China’s refined zinc imports in May were 44,400 mt, significantly exceeding expectations, but over 20,000 mt were imported into bonded areas and have not yet entered the market. Imports are expected to fall back to around 30,000 mt in June, with the supply remaining low. Although policy support still exists on the consumption side, under high temperatures and rainy weather, although zinc prices have fallen, the boost to consumption is limited amid the off-season. Galvanising saw a significant decline in operating rates due to steel prices and order interruptions, with overall weak operating rates.

The model predicts that the average price range for SMM 0# zinc ingot from Friday June 21 to Thursday June 27 will be [23,155, 24,285] yuan/mt, with an average of 23,700 yuan/mt. The extreme price range is [22,900, 24,450] yuan/mt, the normal price range is [23,070, 24,340] yuan/mt, and the conservative price range is [23,240, 24,230] yuan/mt. In the week of June 24, price trend is expected to rebound or hover at highs. The support range is [23,070, 23,240] yuan/mt, and the resistance range is [24,230, 24,340] yuan/mt.

Overall, the fundamentals show a weak supply and demand situation, and zinc prices may remain range-bound, with attention to changes in macro sentiment. The SHFE 2407 zinc contract is expected to trade in the range of 23,200-24,200 yuan/mt, and LME zinc in the range of $2,750-2,900/mt, with a discount against the 2407 contract of 80-20 yuan/mt in Shanghai.