Zinc concluded the trading session with a decline of 0.77%, settling at Rs 321.7, influenced by a combination of increased production in China and the strengthening of the dollar, which exerted downward pressure on the market. In December 2025, China’s refined zinc production reached an unprecedented 675,000 tons, reflecting a year-on-year increase of 13.1%. This surge in output can be attributed to smelters intensifying production efforts to capitalize on favorable market prices.

For the full year, refined output reached 7.41 million tons, reflecting an approximate 6% increase relative to 2024. Despite this surge, supply-side concerns continue to bolster prices, as routine maintenance shutdowns at various Chinese mines are anticipated to diminish concentrate availability in the short term. On the demand side, investor sentiment remains cautious due to ongoing apprehensions regarding China’s economic data, although factory activity in certain regions exhibited moderate expansion in January.

Treatment charges for zinc have exhibited an upward trend, approaching $100 per ton after experiencing negative values at the conclusion of the previous year. LME inventories experienced a significant decline, reaching 110,000 tons, a decrease from 230,500 tons at the beginning of 2025. Concurrently, stocks on the Shanghai Futures Exchange fell by 10.9% compared to the previous week, indicating a constrained physical supply. The global refined zinc market recorded a surplus of 53,000 tons during the first 11 months of 2025, although a minor deficit was observed in November.

From a technical perspective, the market is experiencing new selling pressure, as evidenced by a 1.27% increase in open interest to 3,593. Support is currently identified at Rs 319.5, with an additional examination at Rs 317.4 should prices decline further. Resistance is positioned at approximately Rs 325.2, with a prospective upward movement aimed at Rs 328.8.