Zinc settled 1.04% higher at Rs 429.05, while LME zinc prices surpassed $4,000 per tonne for the first time since 2022, reflecting considerable supply pressures in the market. Production disruptions at several mines, including those in China, coupled with restricted Iranian ore shipments due to heightened tensions in the Middle East, have raised concerns regarding the availability of concentrate. Major mines such as Antamina in Peru and Red Dog in Alaska have seen a decrease in output as lower-grade ore sections are being processed. Additionally, significantly reduced smelter treatment charges indicate a tightening in concentrate supplies. LME warehouse inventories are historically low, with physical zinc availability notably restricted outside of China.

However, increasing Chinese exports may offer some alleviation. Inventories of zinc at the Shanghai Futures Exchange experienced a reduction of 3.3% compared to the preceding week. Nexa reported Q2 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. Glencore reported own-sourced zinc production of 365,600 tonnes during H1 2026, reflecting a decline of 21% year-on-year, while upholding its 2026 guidance of 700,000-740,000 tonnes.

Boliden’s zinc concentrate production decreased by 16.8% on a quarter-on-quarter basis, totalling 74,200 tonnes. In contrast, MMG achieved a production of 106,000 tonnes in the first half of the year, which accounts for 48% of its annual guidance. The global refined zinc market transitioned into a deficit of 31,400 tonnes in June, a shift from the surplus of 22,400 tonnes recorded in May. Nevertheless, the first half of the year maintained a surplus of 120,000 tonnes, in contrast to the 74,000 tonnes observed in the same period last year. Elevated prices may, however, dampen demand and dissuade Chinese purchasers.

Technically, the market is experiencing short covering, evidenced by a 0.53% decline in open interest to 2,605, alongside a price increase of Rs 4.4. Zinc is presently finding support around Rs 424.9, and a consistent breach beneath this threshold may result in a challenge of Rs 420.7. On the upside, resistance is positioned at Rs 431.4, and a decisive movement above this threshold could propel prices toward Rs 433.7.