MCX Live News

Zinc prices increased by 1.04% to Rs 296.25, reflecting LME levels surpassing $3,015 per tonne for the first time this year, driven by escalating supply concerns. Despite a 6.3% year-on-year increase in mined zinc output during the first half of 2025, refined production experienced a decline of more than 2%. This downturn can be attributed to smelter bottlenecks, particularly in Kazakhstan and Japan, where the Annaka plant operated by Toho Zinc has ceased operations.

Mitsui Mining and Smelting has announced a planned reduction of 6.6% in refined zinc output for the latter half of FY2025/26. LME zinc inventories have experienced a significant decline, decreasing by 80% this year to a mere 48,825 tons. Concurrently, the premium of cash LME zinc over the three-month contract has risen to $51 a ton, indicating a constricted supply in the near term. In the interim, anticipations surrounding U.S. interest rate reductions and a possible resurgence in demand come October are providing additional backing. Nonetheless, the lackluster demand from China, particularly stemming from the beleaguered real estate sector, persists in constraining potential gains.

On the global front, the International Lead and Zinc Study Group reported a surplus of 30,200 tons in July, contrasting with a deficit of 21,100 tons in June. However, the overall surplus for the year continues to be smaller than that of 2024. Production disruptions stemming from significant rainfall in southern China, along with maintenance shutdowns, may lead to a contraction in supply in the near term, which could partially counterbalance the increasing output from Peru’s Antamina mine.

Zinc is experiencing renewed buying interest, with open interest rising by 1.6% to 3,687, while prices have appreciated by Rs 3.05. Immediate support stands at Rs 293, with the potential for a test of Rs 289.7 if this level is breached. Resistance is identified at Rs 298.4, and a movement above this threshold could propel prices toward Rs 300.5.