Zinc settled 3.03% higher at Rs. 412.65, gaining Rs. 12.15, as falling inventories, elevated power prices and supply concerns supported market sentiment. The global refined zinc market shifted to a deficit of 3,900 tonnes in August from a surplus of 27,500 tonnes in July, according to the International Lead and Zinc Study Group. Shanghai Futures Exchange zinc inventories declined 5% week-on-week to 137,139 tonnes, their lowest level since March, while available London Metal Exchange inventories stood at 133,700 tonnes. The LME cash contract traded at an approximately $80 per tonne premium over the three-month forward contract, indicating near-term supply tightness.
Western refined zinc production fell 3.4% year-on-year in the first half of 2026 amid elevated energy costs and limited raw material availability, while uncertainty surrounding Nyrstar’s loss-making Budel smelter in the Netherlands added to supply concerns. China’s refined zinc production declined 1.9% month-on-month and 6.4% year-on-year in September. However, expectations of recovering Chinese mine output and increased concentrate availability could limit further gains. The global refined zinc market recorded a surplus of 96,000 tonnes during the first eight months of 2026, compared with 133,000 tonnes in the corresponding period last year.
The ILZSG expects the market to shift from a projected deficit of 88,000 tonnes in 2026 to a surplus of 25,000 tonnes in 2027, as refined production rises 2% to 14.21 million tonnes and mine production increases 3% to 12.78 million tonnes. Global zinc demand is forecast to grow 1.2% to 14.19 million tonnes in 2027, supported by consumption in Europe, India and the United States, although slower Chinese real estate investment may constrain demand growth.
Technically, zinc is witnessing fresh buying, as open interest increased 7.03% to 1,461 contracts alongside a price gain of Rs. 12.15. Immediate support is placed at Rs. 403.00, followed by Rs. 394.00, while resistance stands at Rs. 418.50. A sustained move above Rs. 418.50 could push prices towards Rs. 424.50, whereas a break below Rs. 403.00 may trigger a decline towards Rs. 394.00.
