SMM January 5 News:
At the beginning of the new year, long-term contracts for 2026 have been mostly signed, and a new execution cycle has commenced. The market is paying close attention to the implementation of zinc smelters' long-term contracts this year. SMM has compiled and exchanged information on the long-term contract prices of some enterprises for 2026 as follows:
From the perspective of long-term contract signings, long-term contract prices for 2026 generally increased by 10–40 yuan/mt compared to the previous year. This was mainly due to two factors: first, the full-year 2025 transaction price for self pick-up from warehouses averaged around a premium of 50 yuan/mt over the SMM price, resulting in favorable annual profits; second, there remains some opportunity for zinc ingot exports in 2026, leading to an overall increase in contract prices.
In terms of the supply-demand pattern for 2026, with the gradual release of new zinc ingot capacity, full-year smelter production is expected to increase by approximately 300,000 mt YoY, up more than 4% YoY. However, on the consumption side, as the "15th Five-Year Plan" begins, major consumption is expected to materialize in emerging areas such as AI, while zinc, traditionally driven by infrastructure and real estate, is likely to see limited overall consumption growth. Full-year consumption is projected to grow by 1%–2% YoY, with the domestic supply side mainly in surplus. Overseas smelter production increments are limited, and consumption is expected to perform better compared to the domestic market. With LME outperforming SHFE, intermittent opportunities for zinc ingot exports are anticipated, and actual export volumes should be monitored closely.
