As of September 1st, the price of 0 # zinc was 26948 yuan/ton, up from 26235 yuan/ton on August 31st, with a daily increase of 2.72%.
Core market data
Domestic futures market
On September 1, 2026, the main contract for Shanghai zinc, ZN2610, closed at 27070 yuan/ton, an increase of 715 yuan/ton or 2.71% from the previous trading day. The intraday high reached 27165 yuan/ton, setting a new historical high since May 2022. The total trading volume of the entire market was 280668 lots, with a turnover of 37.886 billion yuan, holding 341819 lots, and increasing positions by 16934 lots.
International Futures Market
LME zinc futures reached a high of $3990/ton during trading, up 2.68% and hitting a new four-year high simultaneously. LME zinc futures are approaching the $4000 mark.
Fundamentally, the resonance between minerals, smelting, and inventory is exacerbated by the combination of financial factors.
Supply side:
Mining sector: Supply gap continues to widen
Geopolitical ‘black swan’: The escalation of the situation in the Middle East directly blocks the external transportation channels of Iranian zinc mines, with an estimated monthly impact of about 15000 to 20000 tons of metal in the market;
Domestic mining production reduction: Several small and medium-sized mines in major production areas such as Inner Mongolia and Yunnan have gradually stopped production due to safety and environmental inspections and declining grades, resulting in a significant decrease in daily production of domestic mines compared to the previous period;
Imported ore ‘quantity reduction and price increase’: The transaction price of processing fees for imported zinc concentrate in August has fallen to -117.50 US dollars per ton, which means that smelters not only cannot receive processing fees, but also need to pay fees to the mining end. This is the first time since 2008 that there has been a sustained negative processing fee, directly reflecting the extreme level of shortage in the mining end.
Smelting end: Negative processing fees force production reduction
Under the dual pressure of high raw material procurement costs and low prices of by-products such as sulfuric acid, more than half of domestic smelters are already in a cash flow deficit state;
According to incomplete statistics, it is known that the total annual production capacity of refineries involved in maintenance and planned production cuts in September exceeded 800000 tons. It is expected that the refined zinc production for the month will decrease by 25000 to 30000 tons compared to the previous month, and the supply contraction is moving from expectations to reality.
Inventory end
LME zinc registered warehouse receipts have dropped to below 100000 tons, the lowest level in nearly three years.
SHFE inventory decreased by 9497 tons per week to 102672 tons, and the destocking slope accelerated.
comprehensive analysis
The internal and external markets have formed a resonance upward pattern. A structurally strong market trend where the supply and demand fundamentals are transmitted and confirmed layer by layer from the mining end to the smelting end. Above 27000 yuan belongs to the high valuation area, with a high risk of chasing after high prices. It is expected to experience strong fluctuations at high levels and intensify volatility.
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