Zinc Prices Rise As Tight Supplies And Lower LME Stocks Support Market Strength

Kedia Advisory - settled 1.14% higher at ₹424.65, supported by tight supplies and declining inventories on the London Metal Exchange, although gains were capped by renewed Middle East hostilities, which pushed oil prices higher and revived inflation concerns. Zinc inventories monitored by the Shanghai Futures Exchange declined 3.3% from the previous Friday, reinforcing the supportive supply backdrop. However, the three-month zinc backwardation narrowed to $85 from more than $200 in late August after 9,975 tonnes were delivered into LME warehouses, indicating some easing in near-term supply tightness. Global mine supply remains constrained, with major producers reporting weaker output.

’s own-sourced zinc production fell 21% year-on-year to 365,600 tonnes in the first half of 2026, down 99,600 tonnes, although it maintained its full-year guidance of 700,000-740,000 tonnes. ’s zinc concentrate production declined 16.8% quarter-on-quarter to 74,200 tonnes, while MMG produced 106,000 tonnes in the first half, representing 48% of its full-year guidance of 215,000-235,000 tonnes. reported zinc production of 79.3 thousand tonnes in the second quarter, up 8% year-on-year, supported by higher ore grades, while Minmetals Resources produced 105,800 tonnes and retained its full-year guidance of 215,000-235,000 tonnes. The global refined zinc market moved into a 31,400-tonne deficit in June from a 22,400-tonne surplus in May, although the first-half market still recorded a 120,000-tonne surplus compared with 74,000 tonnes in the same period of 2025. Elevated prices are nevertheless weakening demand and discouraging buyers in China, the world’s largest consumer.

Technically, the market is under short covering, with open interest declining 0.61% to 2,619 while prices gained ₹4.80. Zinc has support at ₹421.80, and a break below this level could lead to ₹418.90. On the upside, resistance is placed at ₹426.30, while a sustained move above this level could push prices toward ₹427.90.