The SMM Imported Zinc Concentrate Index for this week is $82.25/dmt, with a 4.44% WoW increase. The SMM Imported Lead Concentrate average spot TC for this week is $-60/dmt, unchanged WoW.

[Strong domestic macro tailwinds and LME-driven support boost SHFE zinc's bottom support] The most-traded SHFE zinc 2509 contract opened at 22,530 yuan/mt. After the opening, bears reduced their positions, driving SHFE zinc up to a high of 22,565 yuan/mt. Subsequently, bulls reduced their positions, causing SHFE zinc to decline to the vicinity of the daily average line, where it fluctuated rangebound. It eventually closed lower at 22,515 yuan/mt, down 65 yuan/mt or 0.29%. Trading volume decreased to 81,428 lots, and open interest fell by 1,924 lots to 94,895 lots.....

By July 31, the SHFE zinc main contract closed at 22,345 yuan/mt, down 150 yuan/mt (0.67%). Zinc prices bottomed out in July, hitting a monthly low of 21,865 yuan/mt in early month before rebounding to 23,070 yuan/mt by month-end, supported by domestic funding for the program of large-scale equipment upgrades and consumer goods trade-ins, the implement major national strategies and build up security capacity in key areas, and anti-"rat race" competition policies. How will zinc prices perform in August?

[Downstream purchasing enthusiasm remains low, domestic inventory continues to increase] According to communication with SMM, as of Thursday (August 7), the total inventory of zinc ingots in seven locations tracked by SMM was 113,200 mt, an increase of 10,000 mt from July 31 and an increase of 5,900 mt from August 4, with domestic inventory increasing...

[Off-season characteristics remain evident, with zinc oxide operating rates slightly declining this week] This week, the operating rate of zinc oxide enterprises was recorded at 55.68%, down 0.45% WoW. On the raw material side, due to the current end-use demand still being in the off-season and the difficulty in purchasing some raw materials at higher prices, enterprises mostly made just-in-time procurement of raw materials. The inventory remained basically unchanged from last week, with no significant changes observed. On the finished product inventories side, affected by prices, some zinc oxide enterprises experienced a slight inventory buildup of finished products, with an increase in finished product inventories...

[Production Resumptions and Improved Shipments Lead to a Slight Increase in Operating Rates of Die-Casting Zinc Alloy Enterprises] This week, the operating rate of die-casting zinc alloy enterprises reached 48.42%, up 0.19 percentage points MoM. On the raw material side, affected by the continuous rise in zinc prices this week, enterprises faced increased procurement pressure, leading to a slight decrease in raw material inventories compared to last week. On the finished product inventory side, the lower center of zinc prices at the beginning of the week prompted end-users to conduct a small amount of restocking, and the outflows from warehouses of die-casting zinc alloy enterprises improved. However, as prices rose, enterprises faced difficulties in sales, resulting in a slight increase in finished product inventories MoM this week...

[Low prices drive improved trading at the beginning of the week; premiums and discounts rise slightly this week] This week, premiums and discounts in Guangdong rose by approximately 15 yuan/mt WoW. As of Friday this week, the mainstream 0# zinc quotations in Guangdong were at a discount of 120~50 yuan/mt to the market, and the Shanghai-Guangdong price spread narrowed. The pullback in zinc prices at the beginning of the week drove an improvement in downstream purchasing enthusiasm, with an increase in downstream spot pricing purchases and a slight pickup in spot trading...

[Smelters continue to sign contracts, domestic TCs remain stable]: This week, domestic zinc concentrate TCs remained stable, while imported zinc concentrate TCs increased MoM. Specifically, the average weekly SMM Zn50 domestic TC price remained unchanged MoM at 3,900 yuan/mt (metal content), and the SMM imported zinc concentrate index rose 3.5 US dollars/dmt MoM to 82.25 US dollars/dmt. ....

[Weak downstream orders lead to a drop in Ningbo spot prices to a discount]: This week, Ningbo spot prices turned to a discount, rising by 10 yuan/mt WoW from the weekly average price. As of Friday this week, Ningbo spot prices were at a discount of 20 yuan/mt against the 2509 contract and at a premium of 20 yuan/mt against the SHFE premium. Spot prices against the SHFE premium were basically stable during the week...