The possibility of a significant further decline in zinc prices is not high.

On the macro front, the 20th Third Plenary Session of the domestic government has not released more favorable news, and the market's policy expectations have fallen short, leading to weak macro sentiment. Fundamentally, the market atmosphere is weak. On the supply side, the Huoshaoyun mine has completed 60,000 mt of zinc ore mining operations, with an expected procurement of 250,000 mt of ROM before August. The annual ROM production is estimated to be around 500,000 mt, with a metal content of approximately 120,000 to 150,000 mt. If production is released as planned, it will alleviate the tight domestic ore to some extent. Attention should be paid to the actual output of Huoshaoyun. On the smelting side, maintenance and production cuts continue. With the weakening of zinc prices and TC, the profits of smelters, excluding sulfuric acid and by-products, have dropped to around -2,000 yuan/mt. If the issue of negative profits further expands, smelters may extend maintenance. Although downstream consumption remains weak, low prices stimulated purchasing sentiment among downstream companies, leading to a further decline in social inventory. Considering the good sales performance of smelters and traders, social inventory is expected to continue to decline in the week ending July 26. Overall, zinc prices fell below 23,500 yuan/mt, and downstream purchasing sentiment is good, while the supply side remains weak. Therefore, the possibility of a significant further decline in zinc prices is not high.

The model predicts that the average price of SMM 0# zinc ingot from July 18 to July 24 will range between 23,650 and 24,810 yuan/mt, with a price center of 24,190 yuan/mt. The extreme price range is 23,230 to 25,080 yuan/mt, the normal price range is 23,510 to 24,900 yuan/mt, and the conservative price range is 23,790 to 24,720 yuan/mt. In the week ending July 26, prices are expected to be sideways or swing on a soft note. The support range is 23,510 to 23,790 yuan/mt, and the resistance range is 24,720 to 24,900 yuan/mt.