SHFE zinc surged on June 15, primarily driven by progress in US–Iran peace talks, which eased the geopolitical risk premium, revived risk-on sentiment, and triggered capital inflows into the base metals complex, lifting SHFE zinc price, while additional support came from tightening refined zinc supply and declining smelter by-product revenues. However, downstream buying interest remained subdued amid weak consumption, and persistent high inventories with social stocks rising again on June 15 capped further upside for SHFE zinc.
The domestic zinc concentrate market remains in an overall supply-tight pattern, with notable divergence between north and south: small volumes of concentrate in the north still trade at positive TCs, whereas negative TCs have become common for high-grade ore and in most southern regions.
With the SHFE/LME arbitrage ratio continuing to weaken and only a modest recovery in port stocks, insufficient to fill smelters' raw material gaps, smelters are aggressively competing for concentrate, keeping mine prices firm.
The near-term concentrate shortage is unlikely to reverse; TCs remain biased to fall further with little room on the upside. Overall, zinc prices are expected to trade with a firm bias, caught between strong mine-side support and weak demand-side headwinds.
