Weak Demand and Geopolitical Tensions Suppress China's Galvanized Steel Market in July

[SMM Zinc Morning Comment] Overnight, the most-traded SHFE zinc 2610 contract opened at 267,110 yuan/mt, briefly dipped in early trading to a low of 27,030 yuan/mt, then bulls added positions, SHFE zinc quickly rallied, hitting a high of 27,385 yuan/mt near the close, and finally settled up at 27,340 yuan/mt, up 245 yuan/mt, or 0.90%. Trading volume fell to 71,147 lots, and open interest rose by 5,243 lots to 162,000 lots.

[SMM Morning Meeting Summary: Dollar Weakens, LME Zinc Continues to Rise] Overnight LME zinc opened at $3,948/mt, consolidated briefly at the start of the session, dipping to a low of $3,933/mt, then rallied sharply as bears cut positions, climbing all the way to a high of $3,998/mt in the night session. Gains narrowed toward the close, and it settled up at $3,989.5/mt, up $49/mt, or 1.24%. Trading volume fell to 11,333 lots, and open interest decreased by 2,585 lots to 262,000 lots.

MMG announced on September 7 that its Dugald River subsidiary had signed a zinc concentrate sales agreement with Minmetals North-Europe. Under the agreement, approximately 20,000 dry metric tonnes will be sold annually in both 2027 and 2028, with a transaction cap of $50 million per year. Pricing will be based on LME Special High Grade zinc and LBMA silver prices less treatment charges, with delivery on a CIF basis. Located in Queensland, Australia, Dugald River is one of MMG’s core zinc assets, with its concentrates primarily sold to smelters in Asia and Australia. The agreement extends the Minmetals Group’s intra-group sales arrangements and secures a stable sales channel for part of Dugald River’s output over the next two years.