Zinc futures concluded the trading session with a 0.57% increase, reaching Rs 386. This uptick was bolstered by diminishing worries regarding global economic growth, as a decline in crude oil prices alleviated inflationary pressures. Furthermore, supply-side uncertainties in China contributed additional support to the market. Significant rainfall and flooding in various regions of China have heightened apprehensions regarding possible interruptions to mining, smelting activities, and transportation, thereby reinforcing expectations of constrained near-term supplies.

Market sentiment also improved following U.S. President Donald Trump’s suspension of a planned military strike on Iran and the resumption of diplomatic efforts, which eased geopolitical uncertainty. Supply fundamentals continued to provide support, even in the face of varied production trends. A mine in southwest China is projected to decrease zinc concentrate production by approximately 1,000 tonnes in August due to production adjustments. Concurrently, a zinc smelter in central China will conduct routine maintenance, leading to a reduction in refined output estimated between 1,000 and 1,500 tonnes. China’s refined zinc production exhibited continued growth, with May output increasing by 10% compared to the previous year, reaching 641,000 tonnes.

Concurrently, zinc inventories tracked by the Shanghai Futures Exchange saw a 0.6% rise, suggesting sufficient domestic supply. Glencore reported own-sourced zinc production of 365,600 tonnes during the first half of 2026, reflecting a 21% decrease compared to the previous year. In contrast, Boliden experienced a quarter-on-quarter decline in zinc concentrate production of 16.8%. Meanwhile, the International Lead and Zinc Study Group reported that the global zinc market surplus narrowed sharply to 8,700 tonnes in May from 43,400 tonnes in April, highlighting an improving market balance.

Technically, zinc is experiencing new buying activity, as evidenced by a 15.21% increase in open interest to 2,970 contracts, coupled with rising prices, which suggests the establishment of new long positions. Immediate support is positioned at Rs 383.2, with a subsequent level at Rs 380.2 should any weakness materialise. On the upside, resistance is observed at Rs 390, and a sustained breakout above this level may lead to further gains towards Rs 393.8.