Zinc prices in China showed strength in the latest session. According to the latest quotations from Changjiang Nonferrous Metals Network, the average price for 0# zinc was 24,390 yuan per tonne, an increase of 270 yuan from the previous day. The average price for 1# zinc rose 270 yuan to 24,290 yuan per tonne. Die-cast zinc alloy ingots were quoted at 25,100 yuan per tonne, up 300 yuan, while zinc alloy zamak-3 gained 250 yuan to 25,100 yuan per tonne.

On the futures market, the most-active Shanghai zinc contract ZN2608 opened at 24,460 yuan, surged to an intraday high of 24,620 yuan, and settled at 24,400 yuan per tonne. This represents a gain of 155 yuan, or 0.64%, from the prior session, with a settlement price of 24,490 yuan per tonne. The daily trading range was 235 yuan, with a volume of 118,660 lots and open interest of 95,485 lots.

In overseas markets, the latest LME zinc price stood at $3,067 per tonne, declining by $38, or 1.22%.

Key Market Drivers

Cost Factors

A survey indicates that the treatment charge (TC) for imported zinc concentrate remains at a low range of $25-30 per dry tonne. The TC for domestic zinc concentrate is between 2,800 and 3,200 yuan per tonne, nearing the break-even point for smelters and prompting maintenance and production cuts at some higher-cost facilities.

Supply Dynamics

Some smelters in Shaanxi and Yunnan have scheduled maintenance due to tight raw material supply and negative margins, leading to a marginal tightening in domestic zinc ingot supply. Arrivals of imported zinc remain stable, with premiums at the Yangshan port holding at elevated levels.

Demand Overview

Survey data shows operating rates at galvanizing enterprises are at 68%, while die-cast zinc alloy plants are running at 62%, both around the mid-level for the year. Infrastructure-related orders saw a slight sequential improvement in July, although orders from the real estate sector remain weak.

Inventory Status

The latest LME zinc inventory data shows a total of 119,825 tonnes, with a single-day drawdown of 700 tonnes and a declining share from Asian warehouses. Data for SHFE zinc inventories was temporarily unavailable due to interface issues.

Market Outlook and Summary

Shanghai zinc futures closed higher against the broader trend, supported by a confluence of low treatment charges, inventory drawdowns on both exchanges, and smelter production cuts. In the near term, prices are expected to trade with a firm bias within the 24,000-24,500 yuan range.

Data suggests a clear marginal improvement in zinc's fundamentals. Analysts note that bulls currently hold an advantage in the short term for Shanghai zinc, and buying opportunities may be considered on dips, with resistance eyed around the 25,000 yuan level. Key factors to monitor in the coming session include changes in zinc concentrate TCs, galvanizing operating rates, and the weekly SHFE zinc inventory data.