Zinc prices declined by 0.33% to Rs 290.45, reflecting a downturn in industrial metals, influenced by a selloff in U.S. regional bank shares that has rekindled apprehensions regarding credit risks and the trajectory of global economic growth. Inventories in Shanghai Futures Exchange warehouses increased by 2.5% compared to the previous week, indicating a moderate supply pressure. Nonetheless, losses were constrained due to anticipations regarding possible capacity reductions by Chinese miners and refiners.

The premium for the LME cash zinc contract over the three-month contract has decreased to $75 per ton from $202 earlier in the week, indicating a reduction in near-term tightness. Nevertheless, diminished LME warehouse inventories — currently at their lowest levels since early 2023 — render the market susceptible to fluctuations. On the supply front, Japan’s Mitsui Mining and Smelting reported a 6.6% year-on-year decline in refined zinc output for the second half of FY2025–26, while the closure of Toho Zinc’s Annaka plant is anticipated to restrict regional production.

Meanwhile, Ivanhoe Mines announced a record zinc production of 57,200 tons in the third quarter from its African operations, reflecting a 37% increase on a quarterly basis at the Kipushi mine. The global zinc market experienced a surplus of 30,200 tons in July, as per reports, with the cumulative surplus for 2025 currently at 72,000 tons.

From a technical perspective, the market is experiencing long liquidation, evidenced by a 4.56% decline in open interest, which now stands at 2,572. Zinc exhibits support levels at Rs 288.3 and Rs 286.2, with resistance identified at Rs 292 and Rs 293.6.