Spot Market: LME zinc spot premium stands at -$20.27 per tonne. The SMM Shanghai zinc spot price decreased by 30 yuan to 24,450 yuan per tonne compared to the previous trading day, with a spot premium of 5 yuan per tonne. The SMM Guangdong zinc spot price fell by 30 yuan to 24,460 yuan per tonne, with a spot discount of -50 yuan per tonne. The Tianjin zinc spot price dropped by 40 yuan to 24,360 yuan per tonne, with a spot discount of -85 yuan per tonne.

Futures Market: On May 20, 2026, the main Shanghai zinc futures contract opened at 24,600 yuan per tonne and closed at 24,730 yuan per tonne, an increase of 140 yuan from the previous trading day. Daily trading volume reached 95,271 lots, with open interest at 59,621 lots. The intraday high touched 24,745 yuan per tonne, while the low was 24,385 yuan per tonne.

Inventory Data: As of May 20, 2026, the total zinc ingot inventory across seven SMM-monitored locations stood at 266,000 tonnes, an increase of 1,800 tonnes from the previous period. LME zinc inventory was 112,050 tonnes, a decrease of 450 tonnes from the previous trading day.

Strategic Analysis: The zinc spot market has not shown significant improvement, with downstream consumption indicating signs of entering a seasonal lull. Affected by invoice quotas, spot supply in the market is relatively tight, leading traders to hold firm on prices and be reluctant to sell. The supply side continues to evolve favorably. Following an explosion at a smelter in Kazakhstan, a fire at a Peruvian smelter has caused partial facility damage and a temporary operational halt, potentially reopening export opportunities. The downward trend in ore prices persists, with imported ore offers at -$60 per tonne and metal content priced separately. Domestic zinc concentrate treatment charges (TC) are expected to decline further, compressing overall smelting profits. Consequently, ore costs are providing substantial support to zinc prices. Energy supply issues in Peru have not yet materially impacted ore supply, but risks remain. On the consumption side, short-term factors are relatively bearish. Domestic inventories have not entered a significant destocking phase, exerting some downward pressure on prices. Market attention is on whether changes in US-Iran relations could alter the current pessimistic consumption outlook.

Risks: 1. Unexpected disruptions to overseas ore supply. 2. Domestic consumption falling short of expectations. 3. Liquidity changes exceeding forecasts.