As of July 28, LME zinc inventories (including off-warrant stocks) had fallen to 119,600 mt, down by approximately 45,000 mt from mid-June. As overseas inventories continued to decline, the LME zinc market structure shifted from contango to backwardation, with the backwardation widening further. By July 28, the LME zinc cash-to-3M spread had strengthened to US$61.09/mt.

On July 9, a fire broke out at an air pollution control facility in the sulphuric acid production area of the No. 1 plant at Young Poong’s Seokpo Smelter in South Korea. According to the company’s preliminary statement, the affected facility is located at the tail end of the roaster off-gas treatment system and is not part of the smelter’s core zinc production equipment. No casualties or leaks of hazardous substances have been reported, while production is currently unaffected. The cause of the fire and the extent of the equipment damage remain subject to a joint investigation by the relevant authorities. Attention should be paid to whether repairs to the facility could subsequently constrain roasting operations. Given that the smelter is already undergoing routine maintenance, the overall impact of the incident on refined zinc output is expected to be relatively limited.

[China's Zinc Concentrate Market] This week, China's zinc concentrate TCs extended their decline. In June, some domestic smelters conducted routine maintenance and cut production, but the overall refined zinc output did not drop significantly MoM. The domestic ore shortage has yet to ease, and close attention will be paid to the operating conditions of smelters going forward.

[Zinc concentrate TCs remain low, keep watching subsequent smelter operations]: From weekly data, the SMM Zn50 domestic weekly TC average fell by 150 yuan/mt Zn WoW to -200 yuan/mt Zn, and the SMM import zinc concentrate index fell by $0.56/dmt WoW to -$71.76/dmt..

On May 29, Nexa Resources said its Cajamarquilla zinc smelter in Peru is gradually resuming production following the incident reported on May 13. the electrolysis lines are now fully operational, while one casting line has been back in operation and is currently producing zinc bars. Nexa plans to restart the second casting line within the next few days, followed by the final casting line by mid-June. As a result of the temporary disruption, Nexa estimates a refined zinc production impact of approximately 7,000 mt in Q2 2026, equivalent to around 2% of annual production. The company expects to recover the lost output during H2 2026 and has kept its 2026 sales guidance unchanged. No material financial impact's expected from the incident, with the cause remain under investigation.

[No Significant Production Cuts at Smelters in May; Zinc Concentrate TCs Continued to Decline]: Based on weekly data, the SMM Zn50 domestic weekly average TC fell 150 yuan/mt Zn WoW to 700 yuan/mt Zn, and the SMM imported zinc concentrate index dropped $6.5/dmt WoW to -$45.75/dmt.

During the May Day holiday in 2026, LME zinc traded in a general sideways range, finding solid support at the 40-day moving average. In terms of specific performance, LME zinc showed an N-shaped trend of rising first, then falling and rebounding again.

Hindustan Zinc Limited, the world’s largest integrated zinc producer, released its production figures for the fourth quarter and full year ending March 31, 2026. The company maintained consistent output across zinc, lead, and silver, sustaining operational momentum and reinforcing its standing as a top base metals producer. The data demonstrates continued efficiency and strong capacity utilization throughout the year. In Q4 FY 2025‑26, Hindustan Zinc achieved a record quarterly mined metal production of 315 kt, up 2 % year‑on‑year, while refined metal output also hit a new high of 282 kt. For the full year, mined metal production reached 1,114 kt, and refined zinc output totaled 851 kt, underscoring robust operational performance.

During the Chinese New Year break, LME zinc's price center first declined and then rose. The 40-day moving average consistently supported the daily candlestick of LME zinc. After opening, the price center of LME zinc pulled back, hitting a low of $3,253/mt before rebounding steadily. Overall, the price center recovered, and as of Friday's close, LME zinc settled at $3,378/mt, up $35.5/mt for the week, a gain of 1.06%.

SMM Analysis：As of January 30, the most-traded SHFE zinc contract closed at 25,835 yuan/mt, up 2,525 yuan/mt for the month, a gain of 10.83%. Zinc prices rose significantly in January, hitting a low of 23,410 yuan/mt early in the month and reaching a high of 26,985 yuan/mt by month-end, with the overall price center shifting notably higher. With the Chinese New Year holiday approaching, how will zinc prices perform in February......