Zinc prices concluded the trading session with an increase of 0.68%, reaching Rs 369.95. This rise is attributed to the constricting global supply dynamics, which have been influenced by recent interruptions at key zinc processing plants. Market sentiment improved following Nexa Resources’ decision to temporarily halt operations at its Cajamarquilla zinc smelter in Peru, the largest zinc smelter in Latin America, due to a fire that caused damage to essential infrastructure. The disruption ensued due to operational setbacks at Kazzinc facilities, owned by Glencore, in Kazakhstan. Production was curtailed following an explosion that affected zinc and lead operations. These incidents heightened apprehensions regarding the already constrained global supplies of refined zinc.

Fundamentally, the International Lead and Zinc Study Group had previously forecasted a 19,000-ton deficit in the refined zinc market for the current year, and the recent disruptions have further underscored the risks on the supply side. Zinc inventories on the London Metal Exchange stood at a critically low level of 111,250 tonnes, which corresponds to less than three days of global consumption, underscoring the scarcity of available stocks. However, the cash LME zinc contract continued trading at a discount to the three-month contract, indicating that immediate physical tightness has not yet fully materialised. Supportive macroeconomic signals also emerged from China, where authorities reaffirmed their commitment to sustaining accommodative monetary policies and enhancing support for domestic demand and technological investment.

However, the potential for further gains appeared limited following the confirmation from Swedish miner Boliden that production at its Garpenberg zinc mine would recommence in the second quarter. Furthermore, Japan’s Mitsui Mining and Smelting has revealed intentions to boost refined zinc production by 3.2% in the first half of the 2026/27 financial year. The global zinc market surplus contracted significantly to 32,700 tonnes in March, down from 58,700 tonnes in February, suggesting a trend towards enhanced market equilibrium.

Goldman Sachs anticipates a modest surplus for the current year, while projecting that tighter conditions will emerge post-2027 due to a deceleration in mine supply growth. Technically, the market is experiencing short covering, evidenced by a 4.04% decline in open interest to 1,803 lots, alongside a price increase of Rs 2.5. Zinc is maintaining support at Rs 368.7, with a probable decline towards Rs 367.3, while resistance is identified at the levels of Rs 371.4 and Rs 372.7.