Zinc concluded the day with an increase of 0.88%, reaching Rs 304.7, buoyed by enhanced sentiment stemming from China’s October inflation figures. The alleviation of deflationary pressures, evidenced by a 0.2% increase in the consumer price index and a reduction in factory-gate price declines to 2.1%, has bolstered optimism regarding an economic recovery in the world’s largest metals consumer. Furthermore, advancements in the U.S. Senate regarding the passage of a funding bill aimed at concluding the unprecedented government shutdown have contributed to an increased risk appetite. Nonetheless, the potential for growth was limited by disappointing manufacturing PMIs in both China and the U.S., indicating a lack of robust industrial activity.

On the supply side, global zinc inventories outside China have continued to decline, with LME stocks recorded at merely 35,200 tons — approaching their lowest levels since March 2023 and reflecting a decrease of approximately 85% since the beginning of the year. This has resulted in a pronounced cash-to-three-month premium of $170 on the LME, underscoring the tightness in near-term supply.

In contrast, China’s social zinc stocks increased to approximately 162,000 tons by late October, highlighting a significant divergence between domestic surplus and overseas shortage. The International Lead and Zinc Study Group reported a global market surplus of 47,900 tons in August, resulting in a year-to-date surplus of 154,000 tons, an increase from 138,000 tons in the previous year.

The market experienced new buying activity, evidenced by a 4.54% increase in open interest to 2,807, alongside a price increase of Rs 2.65. Zinc exhibits support levels at Rs 303 and Rs 301.3, with resistance identified at Rs 306 and Rs 307.3. A breakout beyond these thresholds may further amplify the bullish momentum.