Amidst tightened supplies and mounting fears about production interruptions in China, where heavy rainfall and flooding are endangering mining and smelting operations, zinc finished 0.42% higher at Rs 399.20. Production adjustments at a mine in Southwest China are anticipated to decrease concentrate output in August by approximately 1,000 tonnes. Concurrently, maintenance activities at a smelter in Central China may lead to a reduction in refined output ranging from 1,000 to 1,500 tonnes. Global supply concerns were underscored by diminished output from key producers, although the delivery of nearly 10,000 tonnes of zinc into LME warehouses in Asia constrained the potential for price increases.

Nexa reported second-quarter 2026 zinc production of 79.3 thousand tonnes, reflecting an 8% increase year-on-year, bolstered by improved ore grades. In contrast, Minmetals Resources produced 105,800 tonnes and upheld its full-year guidance of 215,000–235,000 tonnes. Glencore reported own-sourced zinc production of 365,600 tonnes in the first half, reflecting a 21% decline year-on-year, yet it maintained its guidance for 2026 at 700,000–740,000 tonnes. Boliden’s zinc concentrate production experienced a decline of 16.8% quarter-on-quarter, totalling 74,200 tonnes. In contrast, MMG reported a production of 106,000 tonnes in the first half, representing 48% of its full-year guidance. China’s Shanghai Futures Exchange zinc inventories rose by 2.1% compared to the previous week, as high prices persistently dampened demand and deterred potential buyers.

China’s refined zinc production totalled 641,000 tonnes in May, reflecting a 10% increase compared to the same month last year. The global refined zinc surplus contracted significantly to 8,700 tonnes in May, down from 43,400 tonnes in April. However, the cumulative surplus for the first five months remains at 163,000 tonnes. China’s central bank reaffirmed its dedication to maintaining a suitably accommodative monetary policy alongside enhanced fiscal-monetary coordination aimed at bolstering growth and ensuring financial stability.

Technically, the market is experiencing short covering, as evidenced by a 9.99% decline in open interest to 2,271 contracts, accompanied by a price increase of Rs 1.65. Zinc is currently finding support at Rs 395.20, and a breach of this level may reveal Rs 391.10. On the upside, resistance is positioned at Rs 401.60, and a sustained move above this level may catalyse a progression toward Rs 403.90.