Zinc prices experienced a decline of 0.56%, closing at Rs 308.6, amid ongoing concerns regarding the economic repercussions stemming from the conflict in the Middle East, which persistently impact the overall sentiment in the industrial metals sector. Increasing oil prices have exacerbated inflation concerns and cast uncertainty over global growth, thereby constraining potential upside, even in light of some encouraging signals from China. There are conflicting indicators regarding the dynamics of demand and supply.

On one hand, sentiment showed a modest improvement following the postponement of U.S. strikes and indications of recovery in China, where industrial output increased by 6.3% year-on-year in the initial two months of 2026. Conversely, zinc inventories in China have reached multi-year peaks, with stock levels on both the Shanghai Futures Exchange and LME increasing, underscoring persistent supply pressures. On a global scale, the market has transitioned into a modest surplus, with January reflecting an excess of 9,200 tons, as reported.

Supply dynamics are currently in flux, as evidenced by the resumption of operations at Ireland’s Tara mine and heightened production from initiatives such as Kipushi, contributing to overall availability. Nonetheless, apprehensions regarding constrained supply in specific areas and potential long-term shortages are providing a degree of fundamental support.

From a technical perspective, the market is experiencing long liquidation, as evidenced by a 25.08% decline in open interest to 487. Immediate support is identified at Rs 307.4, with a breach below expected to challenge Rs 306.1. On the upside, resistance is positioned at Rs 310.8, and a breach above this level could propel prices toward Rs 312.9.