On June 11, SHFE zinc futures retreated, prompting downstream consumers to replenish inventories at lower prices, resulting in active fixed-price transactions.
Overall, tightening supply and declining profits from by-products have jointly supported zinc prices. However, weak downstream consumption and persistently high inventory levels continue to cap upside potential.
Regarding raw material fundamentals on June 11, domestic treatment charges (TCs) held steady from the previous trading day, while domestic zinc concentrate prices edged lower. Imported zinc concentrate prices also decreased, with mainstream TC quotations remaining unchanged. Domestic mines are unlikely to release significant incremental output in the short term, indicating rigidly tight supply of zinc concentrates.
Under dual pressures of raw material shortages and financial losses, some smelters have already initiated substantive production cuts. The zinc concentrate market is expected to maintain a pattern of sustained tightness and low TCs. Smelters are currently struggling to stay afloat by relying on by-product revenue; should TCs decline further, the probability of concentrated smelter production cuts will increase significantly.
