On the spot market, the LME zinc cash premium stood at US$70.75 per tonne.
The SMM Shanghai zinc spot price fell 250 yuan per tonne from the previous trading day to 25,585 yuan per tonne, with the Shanghai spot premium/discount at -10 yuan per tonne.
The SMM Guangdong zinc spot price declined 245 yuan per tonne from the prior session to 25,600 yuan per tonne, carrying a premium of 5 yuan per tonne, while the Tianjin zinc spot price dropped 250 yuan per tonne to 25,560 yuan per tonne, at a discount of 35 yuan per tonne.
On the futures side, the most-traded SHFE zinc contract opened at 25,910 yuan per tonne on November 2, 2026, and closed at 25,615 yuan per tonne, down 275 yuan per tonne from the previous trading day.
Total trading volume for the session reached 170,767 lots, with open interest at 112,780 lots; the intraday high touched 25,940 yuan per tonne and the low reached 25,460 yuan per tonne.
On inventories, SMM zinc ingot stocks across seven regions totaled 188,300 tonnes as of November 2, 2026, a change of 5,000 tonnes from the prior reading.
LME zinc inventories stood at 158,575 tonnes as of November 2, 2026, down 2,700 tonnes from the previous trading day.
Strategy analysis
Crude oil prices retreated sharply from high levels while zinc prices staged a modest rebound, yet oil price uncertainty remains elevated, and the United States has signaled it will take military action against Iran again after the midterm elections.
In addition, violent swings in U.S. equity markets have sent signals of a liquidity crisis, and macroeconomic pressure remains a persistent cap on non-ferrous metals.
At the micro level, no bearish signals have emerged; tight mine supply persists, a mining accident in Peru could worsen the tightness, and the downward trend in treatment charges remains intact, although the pace of decline has eased on a month-over-month basis.
The elevated LME 0-3 premium reflects a degree of concern that future energy price gains will trigger smelter production cuts, keeping the export window continuously open.
No large-scale voluntary production cuts have appeared among smelters at home or abroad, but with treatment charges falling and sulfuric acid prices retreating rapidly from highs, smelting losses have widened further, raising the probability of output cuts on the smelting side.
Risks
1. Unexpected disruptions at overseas mines. 2. Domestic consumption falling short of expectations. 3. Liquidity changes exceeding expectations.
Investment consulting business qualification: CSRC License [2011] No. 1289.
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