Tianjin Zinc Ingot Spot Premiums in the Doldrums in May, Surplus Pattern Unlikely to Change in June [SMM Analysis]

Published: May 28, 2026 14:22

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As May draws to a close, the Tianjin zinc ingot market exhibited operational characteristics of "stable supply, constrained consumption, and elevated inventory." Entering June, the market widely expects the oversupply to be difficult to reverse, with evident signs of weakening downstream consumption. Premiums are expected to remain in the doldrums going forward.

Supply side: stable production, accumulating inventory pressure

Supply side, major brand smelters in the Tianjin area maintained largely normal production in May. Although some routine maintenance plans were carried out during the period, they did not significantly impact overall output, and zinc ingot production remained stable at a high level.

Under a normal shipping pace, inventory in the Tianjin area increased notably, and delivery warehouse capacity has essentially reached saturation. Facing elevated inventory pressure, some traders, eager to make shipments and collect payments, competed to lower shipment premiums, causing the Tianjin zinc ingot spot market to persistently trade at steep discounts. Oversupply pressure on the supply side became the primary factor constraining market performance.

Consumption side: high costs and sluggish selling prices, losses triggering production cuts and shutdowns

Consumption side, downstream zinc demand in the Tianjin area was primarily concentrated in galvanising enterprises. Although May was at the tail end of the traditional peak season, consumption performance fell short of expectations. The main reason for the weak consumption side in May lay in the inversion between costs and prices. Downstream enterprises faced a situation of elevated raw material costs coupled with sluggish finished product selling prices, falling into losses. Affected by this, some galvanizing enterprises adopted production cuts and shutdowns to stem losses, leading to a decline in overall zinc consumption. Under the dual effects of high-price suppression of purchases and loss-driven production cuts and shutdowns, the pace of zinc ingot absorption was slow, spot trading activity remained subdued, inventory in the Tianjin area continued to accumulate, and regional premiums remained under pressure.

June Outlook: oversupply continues, premiums unlikely to be optimistic

The overall oversupply pattern remains unchanged in June. Some maintenance in the north has a relatively small impact on zinc ingot supply, and zinc ingot supply is expected to stay in a slightly surplus state. Meanwhile, overall consumption in June lacks substantive bright spots. As the peak season fully ends, downstream subsequent operating rates are expected to be difficult to improve and may even decline further. If the issues of high costs and thin margins remain unresolved, the scope of downstream production cuts and shutdowns may expand, and the destocking speed of zinc ingots will slow down further. Overall, the Tianjin zinc ingot market is expected to continue its oversupply trend in June. Given the notable weakening in downstream consumption and significant destocking pressure in the market, premiums are expected to remain largely in the doldrums going forward, with limited likelihood of a significant rebound.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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