Zinc prices increased by 0.72% to close at Rs 330.85, buoyed by positive industrial indicators and short-term supply constraints. China’s factory activity returning to expansion in March contributed to an uplift in demand expectations, while the decline in inventories at the Shanghai Futures Exchange and persistent mine disruptions provided additional support to prices. Nonetheless, gains were limited as overall market sentiment continued to exhibit caution.

The persistent tensions in the Middle East, coupled with the ambiguity surrounding the ceasefire, are casting a shadow over the global demand forecast for industrial metals. Concurrently, China’s foreign exchange reserves experienced a notable decrease, and the central bank’s decision to withdraw liquidity indicates a more prudent policy orientation, despite an overarching commitment to an accommodative framework.

The supply side presents a relatively balanced outlook. While disruptions and low stockpiles provide temporary support, the resumption of essential mines and increasing production—such as Japan’s anticipated output rise—are projected to maintain a modest surplus in the market. Global data indicates that the zinc market transitioned into surplus in January, albeit the excess is less pronounced than in the previous year.

The market is currently experiencing an uptick in buying interest, as evidenced by a notable increase in open interest, which has surged by 13.1% to reach 2,011, accompanied by a price gain of Rs 2.35. Immediate support is identified at Rs 328.4, whereas resistance is established at Rs 332.4. A persistent advance beyond this threshold may drive prices towards Rs 334.