Spot premiums for zinc ingots in Tianjin recovered during October as lower zinc prices encouraged downstream buyers to rebuild inventories while physical availability in the northern market tightened. The rebound came despite inventories remaining elevated, leaving the market supported by near-term buying but still constrained by excess supply.
Some zinc smelters in northern China reduced output during October, cutting the volume circulating in Tianjin compared with September. Higher oil prices also increased freight costs, prompting traders to raise offers as they sold. Buyers were more willing to accept those premiums while the underlying zinc price was falling, strengthening the increase in spot differentials.
Demand improved after the holiday period as downstream companies gradually resumed production and end-user orders showed a marginal recovery. Galvanizing companies increased purchases during the price pullback and displayed stronger willingness to restock proactively. That buying helped support premiums even though the broader supply-demand balance remained loose.
The market’s inventory position shows why the recovery has not yet become a clear tightening trend. Tianjin stocks held at high levels during October, and the premium increase had already begun to retreat by the time of the latest assessment.
In the near term, Tianjin premiums are expected to fluctuate around parity rather than extend steadily higher. Inventory movements and the actual pace of downstream purchasing are the key checks on whether renewed buying can absorb available metal. Zinc futures contracts on the Shanghai market are quoted in yuan per metric ton and use a five-metric-ton contract size, providing the reference framework against which regional spot premiums and discounts are assessed.