Zinc declined by 0.47% to close at Rs 326.95, influenced by a stronger dollar and ongoing apprehensions regarding China’s demand prospects. As markets in China resumed operations following the holidays, traders looked forward to potential restocking activities; however, the prevailing sentiment was one of caution due to a backdrop of mixed economic indicators. Weak data from China persisted in challenging investor confidence, despite the People’s Bank of China committing to enhanced financial support aimed at stimulating domestic demand and fostering innovation.

On the supply side, increasing inventories limited upward momentum. Stocks on the Shanghai Futures Exchange experienced a notable increase of 23.1% in the past week. On a global scale, the fundamentals continue to exhibit a relatively tight condition. The International Lead and Zinc Study Group indicated a deficit of 33,000 tons in 2025, a reduction from the prior year. Refined demand experienced an increase of 1.9%, reaching 13.86 million tons, while production saw a rise of 2.1%, primarily propelled by developments in China.

Mine output experienced an increase of 5.4%, driven by enhanced production across multiple nations and the recommencement of operations at Ireland’s Tara mine, in addition to the ramp-up activities at Kipushi in the DRC. Goldman Sachs anticipates a modest surplus this year due to an increase in mine supply; however, it projects a deceleration in supply growth post-2027, which could lead to a tighter market once more.

Zinc is currently experiencing renewed selling pressure, as indicated by a 0.36% increase in open interest, bringing the total to 3,934 contracts. Support is identified at Rs 325.3 and Rs 323.7, whereas resistance is positioned at Rs 328.2. A breach of this level could propel prices towards Rs 329.5.