Zinc prices experienced a decline of 1.13%, settling at Rs 366.5, influenced by the strengthening of the U.S. dollar following the postponement of peace talks between the United States and Iran. The dollar climbed to a one-year high as uncertainty surrounding Middle East tensions increased following Switzerland’s confirmation that negotiations between U.S. and Iranian officials would not proceed as planned. The stronger dollar diminished the appeal of industrial metals, exerting downward pressure on overall market sentiment, even in the face of supportive supply-side fundamentals.

However, downside pressure remained constrained due to tightening near-term supply conditions and a series of disruptions among major zinc producers. Concerns have escalated following a seismic event at Boliden’s Garpenberg mine, which has heightened the likelihood of reduced production levels for a prolonged duration. In Peru, Nexa Resources has temporarily halted operations at its Cajamarquilla smelter, recognised as the largest zinc smelter in Latin America, due to a fire that has caused damage to essential infrastructure. Furthermore, Kazzinc, which is owned by Glencore, has maintained operations at a diminished capacity following an explosion at its zinc and lead facilities located in Kazakhstan.

These disruptions underscored apprehensions regarding the availability of refined metals and contributed to mitigating the decrease in prices. Inventory trends continued to show positive support. Zinc stocks in Shanghai Futures Exchange warehouses decreased by 1.2% compared to the previous week, underscoring consistent demand and comparatively constrained market conditions. Meanwhile, China’s central bank upheld an accommodative monetary policy stance designed to bolster domestic demand and industrial activity.

Despite the International Lead and Zinc Study Group’s report of a global zinc market surplus of 26,500 tonnes in April, this figure represents a notable decline from March’s surplus of 56,300 tonnes, suggesting a gradual tightening in market balances. Technically, the market is experiencing long liquidation, as evidenced by a decline in open interest of 8.08% to 1,922 contracts, coinciding with a decrease in prices. Zinc has immediate support at Rs 364.4, with further downside toward Rs 362.4. A persistent rise above the resistance level of Rs 369.7 could extend gains toward Rs 373.0.