Tight Inventory Keeps Zinc Supported Despite Mild Correction

Key Highlights 

1. Zinc prices softened on LME, SHFE, and MCX after earlier supply-driven gains.
2. Global inventories stay tight, boosted by Chinese mine shutdowns and falling SHFE stocks.
3. Macro cues supportive — soft dollar, strong Eurozone data, and rate-cut expectations.
4. Outlook cautiously bullish with MCX support at ₹298–300 and resistance at ₹308–310.

Zinc Prices Ease Slightly Across LME, SHFE and MCX After Gains

• LME zinc traded near US $3,068.80/mt, while
• SHFE spot-linked zinc ranged US $2,857–2,862/mt.
• MCX zinc futures hovered around ₹302.35/kg, reflecting mild correction after earlier gains.
• Hindustan Zinc closed at ₹496.50, down 1.58%, signalling consolidation after recent volatility.

Tight Inventories and Mine Shutdowns Keep Zinc Supply Pressured

• LME 3-month zinc settled at US $3,056.50/mt with stocks around 52,450 tonnes, indicating tight availability.
• SHFE inventories declined 4.42% week-on-week, strengthening supply-tightness sentiment.
• Maintenance shutdowns at zinc mines in Central & Southwest China are expected to curb concentrate output further.
• Despite tightness, rising LME inventories — up nearly 47% since early November — tempered sharp upside moves.
• Overall, global inventories remain thin, keeping an underlying floor under prices.

Market News & Sentiment: Mixed Global Signals as Macro Support Offsets Profit Booking

• Profit booking pushed prices slightly lower on MCX (-0.24%), after strong rally driven by warehouse tightening.
• Positive Eurozone business activity, expectations of a US Fed rate cut, and softer dollar had supported earlier gains.
• Global surplus narrowed to 20,300 tons in September from 32,700 tons in August, as per ILZSG.
• China’s refined zinc exports jumped 243% in October amid LME tightness but weaker domestic demand.
• Refined zinc output in China showed mixed movement — lower in September but seen rebounding in October with plant restarts.

On equities, Hindustan Zinc outperformed Sensex over weekly, monthly, YTD, and long-term periods, but has lagged over one year — reflecting sectoral consolidation.

Market Expectation: Zinc Outlook Cautiously Bullish on Tight Supply 

Analysts expect tight inventories to keep zinc supported, though macro uncertainty and rising LME stocks may restrict a runaway rally.

• MCX Support: ₹298–300/kg
• MCX Resistance: ₹308–310/kg

A break above ₹310/kg indicates bullish continuation, while moves below ₹298/kg may trigger corrective pressure.

Overall tone: cautiously bullish, driven by supply tightness, plant shutdowns, and improving macro cues — though gains may remain gradual.