Zinc prices concluded the trading session with an increase of 0.82%, reaching Rs 376.6. This rise was bolstered by short covering and ongoing apprehensions regarding imminent supply constraints, even amid the prevailing uncertainty related to the US-Iran conflict. Investors maintained their evaluation of diplomatic initiatives designed to alleviate geopolitical tensions and the potential consequences for oil prices, inflation, and the interest rate trajectory of the US Federal Reserve. Additional support stemmed from positive manufacturing data across China, Europe, and the United States, suggesting robust industrial activity in the face of high input costs.

Despite a deceleration in China’s economic growth to its lowest level in three-and-a-half years, officials have committed to maintaining an accommodative monetary policy and enhancing financial support to stimulate domestic demand. Fundamentally, supply-side disruptions persisted in bolstering zinc prices. Production setbacks at Glencore’s Kazzinc facility in Kazakhstan, a temporary suspension at Nexa’s Cajamarquilla smelter in Peru due to fire damage, and operational concerns at Boliden’s Garpenberg mine have tightened near-term supply expectations.

The International Lead and Zinc Study Group had earlier projected a 19,000-tonne refined zinc deficit for the year; however, its latest data indicated that the global zinc market surplus narrowed significantly to 8,700 tonnes in May from 43,400 tonnes in April. In China, refined zinc production saw a year-on-year increase of 9.4% in May, while inventories in Shanghai Futures Exchange warehouses continued their downward trend, indicating robust physical demand.

Goldman Sachs anticipates that the global zinc market will maintain a modest surplus this year; however, it predicts that conditions will tighten beyond 2026 due to a deceleration in mine supply growth coupled with ongoing demand expansion. From a technical perspective, the market experienced short covering, as open interest decreased by 1.67% while prices increased. Zinc has immediate support at Rs 374.6, followed by Rs 372.6. Resistance is positioned at Rs 378.1, and a sustained breakout above this threshold may lead to further gains towards Rs 379.6.