Poor overseas data and a falling dollar have boosted zinc prices

On the macro front, poor overseas data and a falling dollar have boosted zinc prices. Domestically, favorable policy expectations for the 20th Third Plenary Session have kept zinc prices high. Fundamentally, the weak supply-demand has not improved. Although there are new productions from the overseas Kipush mine and the upcoming domestic Huoshaoyun mine tender, considering factors such as quality, shipping schedules, and overseas smelters' demand, as well as the progress of Huoshaoyun's mining, it is difficult to alleviate the domestic ore shortage in the short term. Additionally, due to the ore shortage and insufficient profits, domestic smelters are expected to reduce production by around 40,000 mt MoM in July, continuing the weak supply trend. On the consumption side, the off-season, combined with high temperatures and rainy season, has hindered outdoor construction. Rebar and HRC data also show poor performance, and the continued accumulation of social inventory indirectly indicates weak consumption. However, considering the positive macro sentiment and support from the ore side, bullish funds are quite active, and zinc prices are expected to rise.