Zinc settled 1.03% higher at Rs 417.6, buoyed by tightening supply conditions and disruptions across major producing regions. However, concerns regarding future Chinese export deliveries to the London Metal Exchange and weakness in LME copper constrained further gains. Nyrstar has initiated a strategic review of its zinc smelting operations in the Netherlands, whereas Mitsui Kinzoku of Japan is set to increase its refined zinc production to 117,700 tonnes in the latter half of fiscal 2026, reflecting a 32% year-on-year growth.
China’s industrial profits rose by 15.7% in the initial eight months, a deceleration from the 17.6% growth observed in January to July, as weakened domestic demand counterbalanced the robust performance in high-tech and AI-related manufacturing. Chinese factory activity experienced a rebound in September, as evidenced by the official manufacturing PMI increasing to 50.1 from 49.8. Concurrently, the RatingDog PMI ascended to a five-month peak of 52.1 from 51.5, signalling an enhancement in manufacturing conditions. China’s zinc production fell by 1.8% year-on-year to 639,000 tonnes in August, representing its first annual contraction in almost a year and the weakest performance since May 2025.
Zinc inventories in Shanghai Futures Exchange warehouses decreased by 1.8% compared to the previous Friday, which further bolsters price support. The global refined zinc market observed a modest surplus of 13,000 tonnes in July, with refined production reaching 1.190 million tonnes, surpassing demand, which stood at 1.177 million tonnes. Demand experienced an uptick of 0.56%, marking the end of three consecutive months of decline, whereas refined production saw an increase of 0.3%. China continued to hold its position as the leading producer of refined zinc, with production levels approaching 629,000 tonnes.
Global zinc mine production has experienced a decline for the fifth consecutive month, decreasing by 8% year-on-year to approximately 995,000 tonnes. This marks the most significant contraction since May 2024, underscoring a tightening in upstream availability. From a technical perspective, the market is experiencing short covering, as evidenced by a 7.74% decline in open interest to 2,205, accompanied by a price increase of Rs 4.25. Zinc has support at Rs 413.9, and a break below this level could lead to a test of Rs 410.1. On the upside, resistance is positioned at Rs 419.8, and a sustained movement above this threshold could propel prices toward Rs 421.9.
