Zinc prices experienced a modest decline in the last session, closing 0.14% lower at Rs 325.5, influenced by a strengthening U.S. Dollar Index, which rose above 99.10 in the context of increasing uncertainty related to the ongoing conflict involving the United States, Israel, and Iran. The robust dollar and apprehensions regarding global manufacturing demand exerted downward pressure on prices; however, declines were constrained by the prevailing tight supply conditions in the physical market.

Inventory data presented a varied landscape. Zinc inventories in warehouses tracked by the SHFE increased by 7.04% compared to the prior week, indicating a better short-term supply situation. Nonetheless, overarching supply concerns remain due to prior mine closures and operational disruptions. Meanwhile, China established its 2026 economic growth target at 4.5%–5%, a modest reduction from the previous year’s rate, while the PBOC indicated that it might employ measures such as reserve requirement ratio reductions and interest rate modifications to bolster the economy.

On the supply side, production is experiencing a gradual recovery. The Tara Mine in Ireland, under the management of Boliden, has recommenced operations following a shutdown in 2023, whereas Ivanhoe Mines is progressively increasing production at the Kipushi Mine located in the Democratic Republic of the Congo. The ILZSG reports that the global zinc market experienced a deficit of 33,000 tons in 2025, although production growth is progressively reducing this shortfall.

From a technical perspective, the market is experiencing long liquidation, as evidenced by a 9.52% decline in open interest to 3,298, accompanied by a price decrease of Rs 0.45. Zinc exhibits immediate support at Rs 324, with a breach below this level likely to test Rs 322.4. On the upside, resistance is observed at Rs 327, and a movement beyond that threshold could propel prices toward Rs 328.4.