[Zinc Fundamental Trading Logic Amid the Middle East Conflict: Risk Identification and Opportunity Capture] Global geopolitical conflicts have continued unabated, and news of the recent Middle East conflict has emerged frequently. What impact will this have on the zinc industry? This article provides an analysis from both fundamental and market perspectives:

[Weaker Macro Sentiment, SHFE Zinc Center Shifted Lower]: The most-traded SHFE zinc 2604 contract opened at 24,460 yuan/mt. Early in the session, bulls reduced open interest, and SHFE zinc fluctuated downward to a low below 24,300 yuan/mt. As downward momentum proved insufficient, the SHFE zinc center moved higher. It closed down at 24,415 yuan/mt, down 5 yuan/mt, a decline of 0.02%. Trading volume fell to 105,000 lots, while open interest decreased by 5,934 lots to 74,747 lots.

[SMM Zinc Morning Comment] Overnight, the most-traded SHFE zinc 2604 contract opened higher with a gap at 24,505 yuan/mt, touched a high of 24,525 yuan/mt in early trading, then fluctuated downward to a low of 24,375 yuan/mt as bulls reduced open interest. As bears also reduced open interest, prices rebounded and fluctuated near the daily average line, finally closing up at 24,425 yuan/mt, up 5 yuan/mt, a gain of 0.02%. Trading volume fell to 47,061 lots, and open interest decreased by 3,653 lots to 770.28 million lots.

[SMM Morning Meeting Minutes: US Dollar Index Plunged; LME Zinc Center Moved Higher] Overnight, LME zinc opened at $3,313/mt and dipped to $3,282/mt in early trading. It then fluctuated upward, with its center moving higher to a peak of $3,367.5/mt. After entering the European trading session, prices pulled back. During the night session, LME zinc gradually recouped its losses and returned to trade near the daily moving average.

SMM News on March 10: During the day, the most-traded SHFE lead 2604 contract opened at 16,710 yuan/mt. In early trading, the price edged down slightly before fluctuating higher and then pulling back again. During the session, SHFE lead prices fluctuate rangebound within 16,670-16,690 yuan/mt. Affected by weak downstream consumption recovery and persistently sluggish spot transactions at smelters, lead prices rebounded slightly in the afternoon before coming under pressure. Near the close, SHFE lead prices settled at the day’s low of 16,650 yuan/mt. A bearish candlestick without a lower shadow was recorded, down 90 yuan/mt, or 0.54%. After the Lantern Festival, domestic smelters accelerated the pace of resuming operations, but downstream consumption sentiment remained weak. Spot shipments stayed at low levels, and inventories at some enterprises remained persistently high. SMM expects that lead prices will maintain a fluctuating trend in the short term. Data Source Statement: Except for public information, all other data are processed by SMM based on public information and market communication, and generated relying on SMM’s internal database models. They are for reference only and do not constitute decision-making advice.

Futures: Overnight, LME lead opened at $1,940/mt and stayed relatively strong during the Asian session, hitting a high of $1,942/mt. Entering the European session, it pulled back to hover near the intraday moving average before sliding to an intraday low of $1,927.5/mt. It edged up slightly before the close and finally settled at $1,931/mt, down $15/mt, or 0.77%. Overnight, the most-traded SHFE lead 2604 contract opened at 16,710 yuan/mt. After rising early to a high of 16,750 yuan/mt, it turned lower and weakened, staying under pressure around 16,700 yuan/mt and moving sideways. It rose slightly late in the session and finally closed at 16,720 yuan/mt, down 35 yuan/mt from yesterday, or 0.21%. On the macro front: US President Trump said at a press conference that the US military action against Iran would end “soon,” but “not” within this week. To address market turbulence caused by the military action and to stabilise international oil prices, Trump announced the cancellation of some oil-related sanctions. National Bureau of Statistics (NBS): In February 2026, the national CPI rose 1.3% YoY. On average in January–February, the national CPI increased 0.8% from the same period a year earlier. The work report of the Standing Committee of the National People’s Congress in 2026 disclosed this year’s legislative “construction blueprint”. Centered on accelerating the building of a strong financial country, China will formulate the Financial Law and the Financial Stability Law this year, and revise the Law of the People’s Bank of China and the Law on Banking Supervision and Administration, to build the top-level design of financial rule of law. Spot fundamentals: In the Shanghai market, Chihong lead was quoted at discounts of -100~0 yuan/mt against the SHFE lead 2604 contract. After SHFE lead probed lower and then rebounded, suppliers quoted in line with the market. As delivery approaches, circulating cargoes increased in Jiangsu, Zhejiang, Shanghai. In addition, cargoes self-picked up from production site at primary lead smelters were mostly shipped at discounts, while some suppliers showed significant divergence in shipments. Mainstream producing areas offered ex-works quotations at discounts of 50 yuan/mt to premiums of 100 yuan/mt against the SMM #1 lead average price. Circulating cargoes in the secondary lead market were limited, and smelters held prices firm for shipments. Secondary refined lead was quoted ex-works at discounts of 50 yuan/mt to premiums of 25 yuan/mt against the SMM #1 lead average price. Meanwhile, quotations for imported crude lead increased. Downstream enterprises showed strong wait-and-see sentiment, with relatively scattered procurement, and spot order market transactions showed no obvious improvement for now. Inventory: As of March 6, LME lead inventory stood at 283,875 mt, down 1,025 mt from the previous day; as of March 9, SMM social inventory of lead ingots across five regions continued to rise. Lead price forecast for today: After the Chinese New Year holiday factor faded, both supply and demand for lead ingots increased, but even if secondary lead enterprises delayed resuming operations, lead ingot inventories at smelters were still being digested slowly. With delivery of the SHFE lead 2603 contract approaching, and considering that the spread between futures and spot prices has recently stayed above 200 yuan/mt, suppliers in the spot market showed strong willingness to transfer inventory and ship to delivery warehouse, gradually moving smelter plant inventories to delivery warehouses. Social inventory of lead ingots is expected to continue rising in the short term, and lead price expectations are expected to remain in the doldrums.

On March 9, the average SMM battery-grade nickel sulphate price was flat WoW from last Friday.

[SMM Daily Review: The High-Grade NPI Market Was Briefly Under Pressure, While the Cost-Support Logic Remained Unchanged] News on March 10: SMM’s upstream sentiment factor for high-grade NPI was 2.9, up 0.02 MoM, while the downstream sentiment factor for high-grade NPI was 1.4, up 0.03 MoM.

[SHFE Zinc Center Shifted Higher]: The most-traded SHFE zinc 2604 contract opened at 24,255 yuan/mt. Early in the session, bulls reduced open interest, and SHFE zinc edged lower to test 24,160 yuan/mt. Subsequently, bears reduced open interest, lifting the center of SHFE zinc. It touched a high and finally closed up at 24,420 yuan/mt, up 160 yuan/mt, a gain of 0.66%. Trading volume increased to 161,000 lots, while open interest fell by 4,635 lots to 80,681 lots.

[SMM Zinc Morning Comment] Last Friday, the most-traded SHFE zinc 2604 contract opened at 24,350 yuan/mt. At the beginning of the session, SHFE zinc fluctuated downward, dipping to below 24,220 yuan/mt. Subsequently, bears reduced their open interest, and the center of SHFE zinc moved higher, touching above 24,370 yuan/mt. It finally closed at 24,330 yuan/mt, up 70 yuan/mt, or 0.29%. Trading volume fell to 58,655 lots, and open interest decreased by 932 lots to 84,384 lots.