Zinc prices experienced a slight increase of 0.26%, closing at Rs 346.55. This uptick was bolstered by a reduction in geopolitical tensions between the U.S. and Iran, coupled with constricting supply conditions in the near term. Market sentiment exhibited resilience as declining LME inventories and a contracting Cash-3M contango indicated heightened demand in the near term. Decreased treatment charges for zinc concentrate persistently reflect constrained raw material supply, as evidenced by a 1.8% reduction in zinc inventories on the Shanghai Futures Exchange compared to the prior week.

SMM reported a notable weekly decline of 12,100 mt in port inventories of zinc concentrate, underscoring apprehensions regarding constrained feedstock availability. Supply-side disruptions stemming from persistent mine closures and operational challenges have continued to support price levels. Nonetheless, the potential for gains was limited following the announcement from Swedish miner Boliden that operations at its Garpenberg zinc mine would recommence in the second quarter. Anticipated supply relief is also projected from the recommencement of Boliden’s Tara mine and the gradual increase in production at Ivanhoe’s Kipushi project.

Japan’s Mitsui Mining and Smelting has declared intentions to increase refined zinc production by 3.2% year-on-year, targeting a total of 108,200 metric tons in the first half of FY 2026/27. The International Lead and Zinc Study Group reported that the global zinc market transitioned to a surplus of 9,200 metric tons in January, reversing a deficit of 75,100 tons recorded in December. Goldman Sachs projects a modest global surplus for this year, driven by increasing mine supply. However, it foresees a deceleration in supply growth during 2027 and 2028, which could lead to tighter markets beyond China.

From a technical perspective, the market is experiencing short covering, as evidenced by a 5.16% decline in open interest to 1,968 lots, accompanied by a price increase of Rs 0.9. Zinc is currently experiencing support at Rs 344.3, with potential for additional decline toward Rs 341.9. On the upside, resistance is observed at Rs 349.5, and a breakout above this level could propel prices toward Rs 352.3.