Zinc prices advanced 1.63% to settle at Rs 364.2, buoyed by short covering and ongoing apprehensions regarding constricting mine supply. Zinc remained the sole base metal on the London Metal Exchange to conclude June with its forward curve in backwardation, indicative of constrained near-term availability. Supply disruptions at major mining and smelting operations persisted, supporting prices despite the stronger U.S. dollar and expectations of further U.S. Federal Reserve interest rate increases. Production setbacks at Glencore’s Kazzinc facility in Kazakhstan, Nexa’s Cajamarquilla smelter in Peru due to fire damage, and previous seismic disruptions at Boliden’s Garpenberg mine have heightened apprehensions regarding the immediate availability of refined metals.

Fundamental data exhibited a varied landscape. China’s zinc production saw a year-on-year increase of 9.4% in May, signalling an enhancement in domestic output. Concurrently, warehouse inventories at the Shanghai Futures Exchange experienced a slight decline of 0.1%, suggesting a stable level of physical demand. The International Lead and Zinc Study Group reported that the global zinc market surplus narrowed to 26,500 metric tonnes in April from 56,300 tonnes in March, although the cumulative surplus for the first four months of the year widened to 145,000 tonnes.

Meanwhile, Japan’s Mitsui Mining and Smelting intends to boost refined zinc production by 3.2% in the first half of the 2026/27 financial year. Goldman Sachs anticipates that the global zinc market will maintain a modest surplus in 2026, driven by increasing mine supply. However, the firm projects a deceleration in mine production growth for 2027 and 2028, which may lead to a deficit in markets outside of China as demand continues to grow at approximately 2% per year.

From a technical perspective, zinc is experiencing short covering, as open interest has decreased by 0.74% to 2,416 contracts while prices have risen. Immediate support is positioned at Rs 359.5, with subsequent support at Rs 354.7, while resistance is identified at Rs 366.8. A sustained breakout above this level could extend gains toward Rs 369.3.