- Continuous stock drawdown signals tightening visible supply
- Buying activity remains cautious, largely need-based
London Metal Exchange (LME) zinc prices continued their upward momentum in the week ended 4 April 2026, supported by a sustained drawdown in exchange inventories and improved mid-week sentiment. Prices strengthened notably during the week, moving above the $3,200/t level, as tightening visible supply provided a firm underlying tone despite measured buying activity.
Price trends
LME zinc cash prices opened at $3,161/t on 30 March and remained stable in the initial session before gaining strong upward traction mid-week. Prices rose sharply to $3,237/t on 1 April, marking the weekly high, before easing slightly to $3,235/t on 2 April, indicating some resistance at higher levels.
On a w-o-w basis, cash prices increased by around 2.3%, compared with the previous week’s close of $3,065.5/t, reflecting a continuation of the recovery trend supported by improving fundamentals.
The three-month contract followed a similar pattern. Prices opened at $3,159/t and climbed steadily to $3,241/t by mid-week, before moderating slightly to $3,236/t towards the end of the observed period. The forward curve indicated firm near-term sentiment, supported by ongoing inventory declines.
Inventory analysis
LME zinc inventories continued to trend lower during the week, reinforcing positive market sentiment. Stocks declined from 115,275 t on 30 March to 113,950 t by 2 April, marking a consistent drawdown across sessions.
On a w-o-w basis, inventories registered a decline of around 1.5%, indicating tightening visible supply. The absence of significant fresh inflows and continued withdrawals lent support to prices, although overall stock levels remain sufficient to limit sharp upward spikes.
MCX zinc trends (30 March-4 April)
On the Multi Commodity Exchange (MCX), zinc futures exhibited a firm trend, tracking gains in the global market. The April contract opened at INR 316,000/t on 30 March and moved higher through the week, supported by improved sentiment.
Prices reached a weekly high of INR 326,100/t on 1 April before easing slightly, closing at INR 323,200/t on 2 April, registering a noticeable w-o-w gain.
Open interest declined from 1,865 lots at the start of the week to 1,722 lots by 2 April, suggesting some long liquidation at higher levels. However, trading volumes remained relatively active, indicating continued market participation.
Domestic demand conditions were largely stable, with buying activity remaining need-based amid rising prices.
SHFE zinc trend
On the Shanghai Futures Exchange (SHFE), zinc prices maintained a steady upward trajectory throughout the week. Prices increased from $3,296/t on 30 March to $3,380/t on 3 April, reflecting consistent strength in the Chinese market.
The sustained uptrend indicates relatively stable demand conditions, although buying interest remained measured, in line with broader global trends.
Outlook
In the near term, zinc prices are expected to remain supported by ongoing inventory drawdowns and firm global cues. However, cautious buying activity and still-comfortable stock levels may limit sharp upside.
Prices are likely to find support in the $3,150-3,180/t range, while resistance is expected around $3,250-3,300/t. Market participants are expected to monitor inventory movements and demand signals closely for further directional cues.
Leave a Reply