Forecast: Zinc prices were weak after the Chinese New Year holiday. Interest rate cuts are expected to be postponed, and market sentiment has been weak. However, thanks to the positive domestic fiscal policies, market sentiment has improved slightly. Fundamentally, a large amount of deliveries during the Chinese New Year holiday grew the overall LME zinc inventory to about 270,000 mt, the highest level in three years. The LME0-3 contango expanded to over $42/mt, indicating that short positions of the front-month contract were relatively concentrated. Zinc prices were running weakly.
During the Chinese New Year holiday, the production of smelters was normal, and downstream companies were basically closed. Social inventory increased by more than 60,000 mt in the first week after CNY holiday to 162,300 mt, which was slightly lower than expected. After the holiday, downstream demand has not yet fully recovered, and the resumption of production was slower than that of the same period last year. Most of them will officially restart production after the Lantern Festival on February 24. In addition, as the SHFE/LME zinc price ratio recovered, the refined zinc import window reopened. And it is expected that the amount of imported zinc may increase in March. Overall, against the background of accumulated inventory, zinc prices are running close to the cost of smelters. The tight ore supply still supports zinc prices.
The SHFE 2403 zinc contract prices are expected to move between 20,000-20,700 yuan/mt this week.
LME zinc is expected to trade between $2,330-2,470/mt.
Spot discounts are expected to stand at 60-0 yuan/mt.
![Zinco de Tianjin: Preços do zinco se recuperam, downstream permanece cauteloso [Comentário do meio-dia da SMM]](https://imgqn.smm.cn/usercenter/tAyyp20251217171754.jpg)
