Zinc settled marginally lower by 0.16% at Rs 415.70, influenced by expectations of enhanced availability of Chinese zinc concentrate as previously disrupted mines resumed operations following accidents and safety inspections. Chinese mine output is anticipated to rise on a month-to-month basis in October, which may alleviate raw material limitations for smelters. However, supply concerns persisted as Chinese refined zinc production declined 1.9% month on month and 6.4% year on year in September 2026.
Western refined zinc production declined by 3.4% year on year in the first half of 2026, influenced by high energy costs and limited availability of raw materials. Additionally, Nyrstar’s strategic review of its unprofitable Budel smelter in the Netherlands has sparked worries regarding possible production losses. In contrast, Japan’s Mitsui Kinzoku intends to produce 117,700 tonnes of refined zinc in the latter half of fiscal 2026, reflecting a year-on-year increase of 32%. The zinc inventories monitored by the Shanghai Futures Exchange increased by 1.8% compared to the report from September 30, which contributes to ongoing concerns regarding near-term supply.
As reported by the International Lead and Zinc Study Group, the global refined zinc market experienced a surplus of 13,000 tonnes in July. This was attributed to a 0.3% increase in refined production, reaching 1.190 million tonnes, which surpassed the demand of 1.177 million tonnes, reflecting a 0.56% rise following three months of decline. Meanwhile, global zinc mine production experienced an 8% year-on-year decline, totalling approximately 995,000 tonnes in July. This marks the fifth consecutive monthly decrease and represents the most significant drop since May 2024.
China’s net imports of refined zinc experienced a significant decline of 79% year on year, totalling 38,000 tonnes in the first half of the year. This trend underscores the country’s increasing domestic smelting capacity and a move toward greater self-sufficiency. Technically, the market is experiencing long unwinding, as evidenced by a 3.88% decline in open interest to 2,007 contracts, coupled with a price decrease of Rs 0.65. Zinc has support at Rs 414, below which prices could test Rs 412. Resistance is positioned at Rs 418, and a sustained movement above this threshold could propel prices toward Rs 420.50.
