[Supply Concerns Increased, SHFE Zinc Center Shifted Upward] The most-traded SHFE zinc 2607 contract opened at 24,760 yuan/mt. In the early session, SHFE zinc fluctuated along the daily average line. In the afternoon, bulls increased open interest and SHFE zinc fluctuated upward all the way, touching a high near 25,020 yuan/mt, and finally closed up at 24,985 yuan/mt, up 205 yuan/mt or 0.83%. The trading volume increased to 72,155 lots, and open interest increased by 2,299 lots to 107,000 lots.

Zinc calcine processing fees edged down in May—how will they trend in June?

[Ore Supply Tightness Remains Unchanged, Domestic and Imported Zinc Concentrate TCs Continue to Decline]: Based on weekly data, the SMM Zn50 domestic weekly average TC fell 250 yuan/mt Zn WoW to 150 yuan/mt Zn, and the SMM imported zinc concentrates index dropped $7.19/dmt WoW to -$63.44/dmt.

The zinc market in May 2026 is experiencing unprecedented structural pressure. Import zinc concentrate TCs have fallen to -$56.25/dmt, while domestic TCs have dropped to 400 yuan/mt in metal content on a weekly basis.

[Insight into Provincial Profit Landscape: New Release of Zinc Smelting Profit Model by Province] In May 2026, the zinc market is experiencing unprecedented structural pressure. TCs for imported zinc concentrates have fallen to -$56.25/dmt, while domestic TCs dropped weekly to 400 yuan/mt Zn. Meanwhile, the sulphuric acid export control policy continued to take effect in May, with some 98% smelting acid in south China declining by around 300 yuan/mt, directly impacting an important by-product revenue source for smelters. LME zinc inventory of around 100,000 mt stands in sharp contrast to China's social inventory exceeding 260,000 mt. The pattern of "tight ore and loose ingots" has made smelters the most severely squeezed link in the industry chain......

[Domestic Zinc Concentrates Market] According to market sources, the scrambling sentiment for ore raw materials remained strong recently. With the SHFE/LME zinc price ratio remaining unfavorable, smelters prioritized purchasing domestic zinc concentrates given the price advantage, and zinc concentrate TCs continued to decline across multiple regions in China.

[Geopolitical Tensions Fluctuate as SHFE and LME Zinc Prices Fluctuate Upward] At the beginning of the week, the tug-of-war between longs and shorts intensified. On the macro front, the Middle East situation remained unresolved and market uncertainty persisted, but the US dollar index retreated from highs. Combined with persistently low ex-China zinc ingot inventory, LME zinc maintained a fluctuating trend......

[SHFE/LME zinc price ratio maintained fluctuating trend near 6.9]: This week, the SHFE/LME zinc price ratio maintained a fluctuating trend near 6.9, and the zinc ingot import window remained closed. Outside China, tensions in the Middle East had not yet eased, increasing market uncertainty. The US dollar index pulled back, and combined with persistently low ex-China zinc inventory levels, LME zinc maintained a fluctuating trend.

[Zinc Concentrate TCs in and Outside China Continued to Decline, with Attention on Subsequent June Pricing]: Looking at weekly data, the SMM Zn50 domestic weekly average TC decreased 150 yuan/mt Zn WoW to 400 yuan/mt Zn, and the SMM imported zinc concentrate index fell $2.05/dmt WoW to -$56.25/dmt.

According to the latest customs data, China imported 447,700 mt in physical content of zinc concentrates in April 2026, down 17.95% MoM from March (97,900 mt in physical content) and down 9.49% YoY. Cumulative zinc concentrate imports from January to April totaled 2.0021 million mt in physical content, up 16.92% YoY cumulatively.