Zinc prices experienced an upward movement, concluding with a gain of 1.69% at Rs 325.65, as market participants concentrated on imminent supply disruptions and the potential for reduced availability in the lead-up to the Chinese New Year. Numerous mines in China have declared temporary production halts for the holiday season, with facilities in the southwest and central regions anticipated to reduce zinc concentrate output by over 2,000 tonnes in metal content prior to resuming operations in March. These interruptions contributed to price support, despite the broader fundamentals presenting a mixed picture.

Nevertheless, the potential for upward movement appears constrained by significant supply and weak demand indicators. In November and December, China transitioned to a net exporter of refined zinc, exporting 78,500 tonnes in the fourth quarter, primarily to Asian centers that accommodate LME warehouses. Simultaneously, global mine output experienced a 6.5% increase year-on-year during the initial ten months of 2025, supported by the resumption of operations at Ireland’s Tara mine and a consistent ramp-up at the Kipushi project in the DRC.

Chinese smelters have demonstrated a prompt reaction to elevated prices, resulting in refined zinc production reaching a historic 675,000 tonnes in December, reflecting a year-on-year increase of 13.1%, while total annual output rose by nearly 6%. Inventory trends illustrate this supply response, as SHFE stocks have increased by 8.5% week-on-week. Despite the ILZSG indicating a marginally expanded market deficit in November, the refined zinc market continues to exhibit a surplus for the year to date.

From a technical perspective, the market is experiencing new buying activity, as open interest has increased by 0.26% in conjunction with rising prices. Zinc exhibits support at Rs 320; a decline beneath this level may lead to a test of Rs 314.4. Conversely, resistance is identified at Rs 328.9, with a potential breakout paving the path toward Rs 332.2.