Zinc prices experienced a modest decline of 0.34%, closing at Rs 339.1, primarily attributed to profit-taking following recent increases. Nonetheless, the downside was constrained, as the positive sentiment surrounding the Strait of Hormuz—remaining accessible throughout the ceasefire—contributed to alleviating supply worries and bolstered industrial activity. The resurgence of China’s factory sector into expansion has positively influenced demand expectations for base metals, providing a degree of support at lower levels.

On the supply side, the signals present a mixed picture. Despite the ongoing support from low inventories, mine closures, and delays, the increasing production is beginning to exert pressure on the market. The recommencement of operations at Boliden’s Tara mine, along with the gradual increase in production at Ivanhoe’s Kipushi project, is anticipated to maintain a modest surplus in the market. Data indicated that global zinc transitioned to a surplus of 9,200 tons in January.

In the interim, Peru’s zinc production exhibited robust annual growth, notwithstanding a monthly decrease, while Japan’s Mitsui intends to augment refined output by 3.2% in the forthcoming fiscal period. Macro indicators introduce an additional dimension of complexity. China’s central bank continues to uphold a loose policy stance, as escalating factory-gate prices indicate mounting cost pressures. Nonetheless, apprehensions regarding the wider economic ramifications of geopolitical tensions persist in influencing sentiment.

The market is currently experiencing long liquidation, evidenced by a 2.54% decrease in open interest concurrent with the price decline. Immediate support is identified at Rs 336.7, with additional downside potential towards Rs 334.4. On the upside, resistance is positioned at Rs 342.6, and a movement beyond this threshold could propel prices towards Rs 346.2.