Zinc prices experienced a decline of 0.68%, settling at Rs 365.05, as investor sentiment remained cautious in anticipation of further developments concerning a potential extension of the Iran ceasefire agreement. A firmer U.S. dollar exerted downward pressure on sentiment, rendering base metals less appealing to international purchasers. Additional pressure arose from a 0.7% rise in zinc inventories tracked by the Shanghai Futures Exchange, suggesting a relatively comfortable near-term supply situation in the Chinese market. Despite the decline, the downside remained constrained due to persistent supply disruptions that continue to tighten the global zinc market.

Nexa Resources has temporarily suspended operations at its 344,400-ton-per-year Cajamarquilla zinc smelter in Peru due to a fire that caused damage to essential infrastructure. In a similar vein, Kazzinc’s zinc and lead operations in Kazakhstan are operating at diminished capacity following a recent explosion. These disruptions have underscored apprehensions regarding the availability of refined metals, especially given that LME zinc inventories stand at a mere 111,250 tonnes, which corresponds to less than three days of global consumption. The International Lead and Zinc Study Group previously projected a refined zinc deficit of 19,000 tonnes for 2026, underscoring the market’s delicate supply equilibrium.

However, gains were limited by anticipations of enhanced mine supply. Swedish miner Boliden is poised to recommence production at its Garpenberg mine in the second quarter, while Japan’s Mitsui Mining and Smelting intends to elevate refined zinc output by 3.2% year-on-year in the first half of FY2026/27. The global zinc market surplus decreased to 32,700 tonnes in March, down from 58,700 tonnes in February. However, the surplus for the first quarter expanded to 89,000 tonnes, compared to 44,000 tonnes during the same period last year.

Goldman Sachs anticipates a slight surplus in zinc for 2026, yet predicts increasingly constrained conditions after 2027 due to a deceleration in mine supply growth. Technically, the market is experiencing renewed selling pressure, as evidenced by a 1.2% increase in open interest to 2,439 lots, coinciding with a decline in prices. Immediate support is identified at Rs 362.9, with subsequent support at Rs 360.6. Resistance is positioned at Rs 368.2, and a breakout above this threshold may lead to an extension of gains toward Rs 371.2.