Zinc prices concluded the session with an increase of 0.76%, reaching Rs 417.4. This rise is attributed to concerns over tightening supply, a decrease in exchange inventories, and a boost in economic sentiment. However, it is noteworthy that the escalating prices are starting to exert pressure on physical demand in China. The zinc inventories monitored by the Shanghai Futures Exchange decreased by 1.5% compared to the previous Friday. Concurrently, the premium of cash LME zinc over three-month futures experienced a significant increase, rising to $132 per tonne from zero in early July. This marks the highest level since December 2025, underscoring a tightening in nearby supply.

Heavy rainfall and flooding in certain regions of China have heightened apprehensions regarding potential disruptions in mining and smelting operations. Production adjustments at a mine in Southwest China are anticipated to decrease August concentrate output by approximately 1,000 tonnes, whereas maintenance activities at a smelter in Central China may result in a reduction of refined output by 1,000 to 1,500 tonnes. Global mine supply continues to face challenges, as Glencore disclosed first-half own-sourced zinc production of 365,600 tonnes, reflecting a 21% decrease compared to the previous year. Concurrently, Boliden reported a 16.8% decline in zinc concentrate production quarter-on-quarter, totalling 74,200 tonnes.

Nexa reported second-quarter zinc production of 79.3 kt, reflecting an 8% increase year-on-year. In contrast, Minmetals Resources produced 105,800 tonnes and maintained its full-year guidance of 215,000–235,000 tonnes. MMG produced 106,000 tonnes in the first half, representing 48% of its annual guidance. The global refined zinc market transitioned into a 31,400-tonne deficit in June, a notable shift from the 22,400-tonne surplus recorded in May. However, the first half of the year still reflected a surplus of 120,000 tonnes, compared to 74,000 tonnes during the same period last year. China’s refined zinc output reached 641,000 tonnes in May, reflecting a 10% increase year-on-year, which suggests strong performance in smelter operations. Chinese zinc exports have alleviated apprehensions regarding shortages beyond its borders.

From a technical perspective, the market is experiencing new buying activity, as evidenced by a 3.68% increase in open interest to 2,676 contracts, alongside a price increase of Rs 3.15, which suggests a strengthening of bullish participation. Zinc has established support at Rs 413.8, and a breach below this level may initiate a downward movement toward Rs 410.1. On the upside, resistance is positioned at Rs 419.4, and a sustained movement above this threshold could propel prices toward Rs 421.3.