China’s zinc prices edged lower on January 7, with the SHFE zinc main contract closing down RMB 37/mt at RMB 24,343/mt. Market sentiment turned volatile amid geopolitical tensions, which had supported prices earlier in the week. However, the closure of China’s zinc ingot export window and slower domestic inventory movements led to a more cautious market and fluctuating prices.

Spot market activity remained subdued as downstream buyers adopted a wait-and-see approach. In the Tianjin market, some traders lowered premiums to stimulate transactions, but high price levels and existing inventories continued to weigh on purchasing demand.

On the overseas market, LME zinc inventories declined by 275 mt to 105,500 mt due to reduced arrivals. The cash-to-three-month spread remained in contango. Looking ahead, zinc prices are expected to be influenced mainly by macro sentiment and inventory changes, while China’s vehicle trade-in subsidy policy may provide longer-term support to demand.