Zinc experienced a modest increase, closing up by 0.11% at Rs 305.7, as inventories on major exchanges persisted in their downward trend, offering fundamental support. LME-registered stocks have decreased to 35,875 tons, marking the lowest level since February 2023, whereas SHFE inventories have declined to 100,208 tons, reflecting an 8% reduction over the past fortnight. Despite the tightening of supply fundamentals, the upside remained constrained as weaker manufacturing PMIs in both China and the U.S. negatively impacted industrial demand sentiment.

China’s October economic data provided some relief, as consumer inflation turned positive and PPI deflation eased, indicating early signs of stabilizing economic conditions. Further backing was derived from anticipations that the U.S. Senate would approve a funding bill to prolong government operations until January 2026, thereby alleviating market uncertainty. Global data indicated that zinc inventories outside China are at notably low levels, while ILZSG figures revealed a surplus of 47,900 tons in August and a cumulative surplus of 154,000 tons for the first eight months of 2025.

China’s refined zinc production exhibited divergent trends, reflecting a 4% month-on-month decrease in September, juxtaposed with robust year-on-year growth attributable to prior capacity expansions. Maintenance shutdowns and output adjustments across major producing provinces have also played a role in the variability of supply, with October production anticipated to increase by 4% month-over-month and 22% year-over-year.

The market is witnessing renewed buying interest, as open interest increased by 0.55% to 2,910, accompanied by a price rise of Rs 0.35. Zinc exhibits immediate support at Rs 304.5, with additional downside risk extending toward Rs 303.2. Resistance is established at Rs 307.4, and a breakout above this level could propel prices toward Rs 309.