【Imported Zinc Concentrate Market】The import arbitrage for zinc concentrate has deteriorated further amid a widening gap between domestic and overseas zinc prices, reducing the economic attractiveness of imported material. Smelters continue to prioritize domestic concentrate procurement. Spot trading activity for imported zinc concentrate remained relatively limited this week, while treatment charges (TCs) continued to hover at low levels.

[End-Use Consumption Lacking Sufficient Support, Guangdong Zinc Premiums Move Sideways] This week, Guangdong premiums were up around 15 yuan/mt WoW. As of this Friday, mainstream #0 zinc in Guangdong was quoted at a discount of 75-120 yuan/mt against the market...

[More Frequent Production Control and Cuts Among Enterprises; Die-casting Zinc Alloy Operating Rates Decline] The decline in operating rates was mainly due to weakening end-use demand, with sluggish shipments at alloy plants leading to production control and cuts. Demand side, end-use consumption was in the traditional off-season, with orders across downstream sectors generally weak...

[Weak demand, galvanising operating rate edges down]: This week, the operating rate of the galvanising industry was 53.39%, down 1.47 percentage points WoW. Raw material side, zinc prices continued to consolidate at highs this week, and enterprises' purchases were still mainly based on rigid demand, with zinc ingot inventories at galvanising enterprises continuing to decline.

[Weak Demand, Galvanizing Operating Rates Edge Down]: This week, the operating rate of the galvanizing industry was 53.39%, down 1.47 percentage points WoW. Raw material side, zinc prices continued to consolidate at highs this week, and enterprise procurement remained mainly rigid demand-driven. The zinc ingot inventory at galvanising enterprises continued to decline.

[Tianjin Premiums Remain Stable]: Spot premiums in Tianjin remained little changed this week. As of this Friday, domestic ordinary brands reported discounts of 60-120 yuan/mt against the 2609 contract, high-end brands reported around parity against the 2609 contract, and the Tianjin market reported a discount of around 100 yuan/mt against the Shanghai market. The Shanghai-Tianjin price spread widened. This week's quotes were based on the contract rollover.

[SMM Zinc Morning Comment] Overnight, the most-traded SHFE zinc 2609 contract opened at 24,800 yuan/mt, then dipped to a low of 24,800 yuan/mt. Subsequently, with increased long positions, SHFE zinc steadily climbed to hit a high of 24,935 yuan/mt. However, bears added positions, causing the price to pull back slightly but still trade above the daily average line. Then, amid the tug-of-war between longs and shorts, SHFE zinc moved sideways in a narrow range. It finally closed up at 24,885 yuan/mt, a gain of 185 yuan/mt or 0.75%. Trading volume decreased to 54,696 lots, and open interest increased by 3,258 lots to 108,000 lots.

[SMM Morning Meeting Summary: US dollar index edges down, LME zinc center rises] Overnight, LME zinc opened at $3,582.5/mt. In early trading, LME zinc moved sideways near the daily average line, then edged down slowly. During the European trading session, it dipped to $3,571.5/mt. Prices at the night session shot up to touch $3,625.5/mt. It edged down slightly in late trading, and finally closed up at $3,609.5/mt, an increase of $36.5/mt or 1.02%. Trading volume increased to 9,333 lots, and open interest decreased by 3,194 lots to 244,000 lots.

【SMM Flash】It is learned that zinc prices keep fluctuating at high levels, while end-user consumption remains sluggish. Against this backdrop, die-casting zinc alloy enterprises hold a price-aversion stance and conduct cautious purchasing. Most opt to draw down in-house inventories or utilize delivered long contracts, showing generally low buying interest. In addition, some inventories fixed via forward pricing by market participants have not yet been lifted, and overall demand stays weak.

Befesa reported adjusted EBITDA of €124 million for H1 2026, up 11% year on year. Its steel dust recycling segment generated €104 million of adjusted EBITDA, up 8.3%, with margin expanding by 2.5 percentage points to 27.3%. Higher volumes, stronger zinc prices and operating efficiencies supported the result. Steel dust plant utilization averaged 67.4%, up 3.7 percentage points year on year. Befesa maintained its full-year adjusted EBITDA guidance of €250–270 million and expects to finish near the upper end of the range. The U.S. business was the main volume-growth contributor, with Q2 throughput up 33% year on year following new EAF steel dust supply contracts; U.S. utilization improved by 11 percentage points, while Europe operated at a 91% load factor. Higher waelz oxide sales contributed to a €3 million EBITDA gain, and an average Q2 LME zinc price of $3,463/t, up 31% year on year, added €7 million. Befesa said 2026 zinc concentrate TC settled at $85/t, while spot TCs remained historically low. It has hedged 60–70% of its zinc exposure for 2026–2028, with 2027 and 2028 prices locked at $3,000/t and $3,100/t, respectively.