Zinc concluded the day with a 0.54% increase, reaching Rs 365.15, bolstered by increasingly constrained global supply conditions following several production disruptions that heightened apprehensions regarding the availability of refined metal. Sentiment improved following the temporary suspension of operations at Nexa Resources’ 344,400-ton-per-year Cajamarquilla zinc smelter in Peru due to a fire incident. Meanwhile, Glencore-owned Kazzinc continued to operate at reduced capacity after an explosion at its facilities in Kazakhstan.
Prior to these disruptions, the International Lead and Zinc Study Group had forecasted a refined zinc market deficit of 19,000 tons for 2026, thereby bolstering bullish sentiment. Additional backing was provided by decreasing zinc concentrate treatment charges and diminishing port inventories in China, indicating a constriction in raw material supply. SMM data indicated a week-on-week decrease of 12,100 mt in zinc concentrate inventories at Chinese ports. LME zinc inventories stood at a notably low level of 110,875 tons, which corresponds to less than three days of global consumption.
China’s central bank reaffirmed its dedication to sustaining an accommodative monetary policy while bolstering domestic demand and industrial activity, which has positively influenced sentiment in the base metals sector. Nonetheless, the potential for growth appeared constrained as Swedish miner Boliden declared the recommencement of operations at its Garpenberg zinc mine in the second quarter. The International Lead and Zinc Study Group reported a transition in the global zinc market to a surplus of 9,200 metric tons as of January. Goldman Sachs forecasts a slight global surplus in 2026, driven by enhanced mine supply, while predicting a return to tighter conditions in 2027-28.
From a technical perspective, the market is experiencing new buying activity, evidenced by a 1.3% increase in open interest to 2174, alongside a price increase of Rs 1.95. Zinc is currently finding support at Rs 360.1; should prices fall below this level, they may approach Rs 355.1. Conversely, resistance is identified at Rs 369, with a potential upward movement likely to challenge Rs 372.9.