Zinc concluded the trading session with a 0.98% increase, reaching Rs 328.95, bolstered by anticipated short-term supply disruptions and favorable demand outlooks. As the Lunar New Year draws near, a zinc mine located in Southwest China has halted operations in early February, with a projected resumption in March. This suspension is expected to lead to a decrease in zinc concentrate output by approximately 1,000 tonnes of metal content. A lead-zinc mine in Central China has suspended production for the holidays, which may result in a reduction of an additional 1,000 tonnes.

Nevertheless, the potential for gains is constrained by weaker downstream demand. Chinese purchasers have predominantly finalized their pre-holiday inventory replenishment, resulting in a deceleration of consumption, which increases the probability of inventory accumulation during the seasonal downturn. Additional pressure arises from lackluster economic data in China, although the central bank has committed to enhancing financial support to stimulate domestic demand and foster innovation.

In the fourth quarter, China emerged as a net exporter of refined zinc, with shipments totaling 78,500 tonnes in November and December. In December, refined zinc production reached a historic high of 675,000 tonnes, reflecting a year-on-year increase of 13.1%. This surge brings the total production for the full year of 2025 to 7.41 million tonnes. In November, the global zinc market experienced a deficit of 7,700 tonnes, although it continues to show a surplus for the year to date.

From a technical perspective, the market is experiencing short covering, as evidenced by a decline in open interest of 11.39%, bringing it down to 2,784 lots. Support is identified at Rs 326, with a potential decline toward Rs 322.9. Resistance is positioned at Rs 332.1, with a potential upward movement that may challenge Rs 335.1.