Zinc declined by 0.24% to Rs 308.25 as traders realized profits following recent increases attributed to reduced availability in LME-registered warehouses. Earlier sentiment was bolstered by robust eurozone business activity, which grew at its quickest rate in more than two years, coupled with anticipations of a U.S. Federal Reserve rate cut and a weaker dollar. The global zinc market surplus contracted to 20,300 tons in September, down from 32,700 tons in August, as per reports, providing further support.

Supply concerns have escalated due to impending maintenance shutdowns at mines in Central and Southwest China in December, which are expected to lead to a decrease in zinc concentrate production. SHFE inventories experienced a week-on-week decline of 4.42%, yet the increase in LME stocks — currently at 49,925 tons, reflecting a 47% rise since early November — limited additional upward movement. In October, China experienced a remarkable 243% increase in refined zinc exports, driven by tight conditions in the London Metal Exchange and a lack of robust domestic demand.

Nonetheless, the lackluster Chinese economic indicators have heightened concerns regarding demand. Globally, refined zinc production is anticipated to increase by 2.7%, reaching 13.8 million tons by 2025, as inventories outside of China continue to be notably low. Chinese refined output exhibited a mixed performance, declining in September yet anticipated to rebound in October as production resumes across various provinces.

Zinc is currently experiencing renewed selling pressure, evidenced by a 5.25% increase in open interest to 3,349, while prices have declined by Rs 0.75. Support is positioned at Rs 305.9, with an additional level at Rs 303.6, whereas resistance is identified at Rs 310.6, and a breakout could pave the way toward Rs 313.