Zinc Trades Near 2-Week High

Zinc futures traded around $3,190 per tonne, remaining close to their highest level in two weeks, as investors assessed the latest supply developments. Inventories at the Shanghai Futures Exchange dropped 2.3% over the past week, signaling short-term supply tightness. The market also continues to find support from supply constraints, including low stockpiles and disruptions caused by mine closures and operational delays. However, price gains remain capped due to concerns over the global economic fallout from the Middle East conflict, which could weigh on industrial demand. Expectations of a small surplus this year also temper bullish sentiment, even as long-term supply growth may slow. Additionally, the restart of Boliden’s Tara mine and the production ramp-up at Ivanhoe Mines’ Kipushi project point to more supply.

Zinc futures rose above $3,150 per tonne but remained near their lowest levels since December, pressured by growing inventories and slackened demand. China’s stocks continued to accumulate, reaching relatively high levels in the previous years. On the Shanghai Futures Exchange, inventories went up 3.3% over the week, while LME stocks also remain elevated. Global supply is further boosted by the restart of Boliden’s Tara mine and the ramp-up of Ivanhoe’s Kipushi project, alongside a strong annual production increase in Peru. These developments have offset concerns over tight supply, ongoing mine disruptions, and historically low inventories in certain regions. In addition, demand recovery has been slower than anticipated, despite positive signals from China, where industrial output rose 6.3% year-on-year in the first two months of 2026. Further weighing on prices, the US dollar remained strong, supported by safe-haven demand amid the ongoing conflict in the Middle East.

Zinc futures fell to around $3,050 per tonne, their lowest level since December, as rising inventories at the Shanghai Futures Exchange and in LME warehouses, along with a strong US dollar, weighed on market sentiment. SFE stocks rose 9.2% in a week, while over 21,000 tonnes delivered into Singapore pushed LME inventories to their highest level since July. Adding downward pressure on zinc prices was the US dollar remaining strong amid safe-haven demand linked to escalating Middle East tensions. However, losses were limited due to ongoing concerns about tight supply and historically low inventories in certain regions. Zinc also received support from China’s industrial recovery, with output rising 6.3% yoy in the first two months of 2026 and fixed-asset investment showing modest improvement. Meanwhile, Boliden’s Tara mine in Ireland has reopened after a 2023 shutdown, while Ivanhoe Mines’ Kipushi project in the Democratic Republic of Congo is ramping up production.