SHFE zinc's gains narrowed, with a slight accumulation in social inventory [SHFE zinc closing comment]

In the morning, SHFE zinc opened higher, with intraday gains narrowing continuously, closing slightly up by 0.31%. There were disruptions reported in overseas ore supply, but whether production would be halted remained to be tracked. Domestic social inventory of zinc ingots continued to accumulate slightly, limiting the upside potential for SHFE zinc.

Due to the rebound in zinc concentrate TCs, the market had previously held strong expectations for an increase in supply, but the impact on the smelting side was yet to be transmitted. Yesterday, news emerged that a Russian mine under Zijin Mining was facing the risk of suspended operations. Xinhu Futures stated that the mine's zinc concentrate production in 2024 was 71,300 mt (metal content), but it was understood that the decision on whether to halt production was still under evaluation. Additionally, regarding the supply side, Xinhu Futures also noted that in terms of smelting, domestic refineries were expected to undergo concentrated maintenance in May, with production projected to drop back slightly MoM. Moreover, with the opening of the zinc ore import window in April and a significant increase in port inventory last week, TCs were expected to continue rising slightly.