- Concerns over tightening nearby availability lift LME prices
- MCX gains sharply, SHFE zinc remains under pressure
London Metal Exchange (LME) zinc prices rose by over 2% during the week ended 24 July 2026, supported by a continued drawdown in exchange inventories and renewed buying interest across the base-metals complex. Prices strengthened throughout most of the week, reaching a weekly high on 23 July before easing slightly on Friday amid profit-booking.
W-o-w, LME zinc cash settlement prices increased 2.4% to $3,633/t on 24 July from $3,549/t recorded on 17 July. Prices remained firm through the week as declining LME warehouse stocks reinforced concerns over tightening exchange availability.
Price trends
LME zinc cash settlement prices opened the week at $3,575/t on 20 July, rising from the previous week’s close. Prices strengthened further to $3,591/t on 21 July before advancing to $3,614/t on 22 July.
The upward momentum accelerated on 23 July, with prices climbing to a weekly high of $3,653/t amid renewed buying interest and continued support from declining exchange inventories. However, prices eased to $3,633/t on 24 July as profit-booking emerged after the sharp mid-week rally.
The three-month contract broadly mirrored movements in the cash market. Prices stood at $3,545.5/t on 20 July before rising to $3,566/t on 21 July and $3,583/t on 22 July. The contract advanced further to $3,611/t on 23 July before easing to $3,592/t on 24 July.
The cash market continued to trade at a premium to the three-month contract throughout the week, reflecting relatively firm nearby market conditions and continued tightness in exchange availability.
Inventory analysis
LME zinc inventories continued to decline during the reporting week, extending the recent drawdown trend and providing strong underlying support to prices.
Stocks declined from 111,725 t on 17 July to 109,150 t on 20 July. The downtrend continued through the week, with inventories falling to 108,500 t on 21 July, 107,650 t on 22 July, and 106,075 t on 23 July. Stocks eased further to 105,800 t on 24 July.
Overall, exchange inventories declined by 5,925 t w-o-w. The continued drawdown pushed LME zinc stocks below 106,000 t and reinforced expectations of tightening exchange availability.
The persistent decline in warehouse stocks provided a key source of support to zinc prices during the week, helping the market sustain its upward momentum despite some profit-booking towards the end of the reporting period.
MCX zinc trends (20-24 July)
On the Multi Commodity Exchange (MCX), zinc futures strengthened sharply during the reporting week, tracking the recovery in international zinc prices and improving global market sentiment.
The July contract settled at INR 373,550/t on 20 July before rising to INR 376,600/t on 21 July. Prices strengthened sharply on 22 July, closing at INR 382,750/t, before easing marginally to INR 382,500/t on 23 July.
Buying interest returned on the final trading day, with the contract closing at INR 383,900/t on 24 July. The weekly high stood at INR 386,900/t on 23 July, while the weekly low was INR 372,850/t on 20 July.
On a w-o-w basis, the MCX zinc contract increased by INR 10,750/t, or 2.9%, from INR 373,150/t on 17 July to INR 383,900/t on 24 July.
Open interest declined during the week, ending at 1,776 lots on 24 July compared with 2,331 lots on 20 July. The combination of rising prices and declining open interest suggested that the sharp recovery was accompanied by position unwinding rather than a sustained build-up of fresh long positions.
Domestic consumers largely continued with calibrated procurement, while higher international prices and the sharp recovery in MCX zinc encouraged cautious buying and replenishment on a need basis.
SHFE zinc trends
On the Shanghai Futures Exchange (SHFE), zinc prices remained under pressure during the reporting week, moving lower through the middle of the week before recovering slightly towards the end.
SHFE zinc stood at $3,446/t on 20 July before easing to $3,439/t on 21 July. Prices declined further to $3,409/t on 22 July and remained broadly stable at $3,410/t on 23 July.
Prices recovered marginally to $3,429/t on 24 July, although the contract remained below the week’s opening level. The overall movement reflected mixed sentiment in the Chinese market, with improving global zinc prices and tightening LME inventories offset by concerns over the pace of domestic demand recovery.
Market updates
Market sentiment strengthened during the week as zinc prices recovered sharply across international and domestic markets. The continued decline in LME warehouse inventories remained the key supportive factor, with stocks falling by 5,925 t w-o-w to 105,800 t.
The drawdown in exchange stocks reinforced concerns over tightening nearby availability and helped sustain buying interest in the LME market. This was reflected in the continued premium of cash zinc over the three-month contract, indicating relatively firm nearby market conditions.
LME zinc prices gained momentum through the middle of the week, with the cash contract rising to a weekly high of $3,653/t on 23 July. However, the subsequent decline on 24 July indicated that profit-booking emerged after the sharp rally.
MCX zinc followed the international trend but recorded a stronger recovery in percentage terms. Prices rose 2.9% w-o-w to INR 383,900/t, with the contract gaining more than INR 10,000/t during the reporting week. However, the decline in open interest suggested that the rise was partly supported by the unwinding of short positions.
Meanwhile, SHFE zinc prices remained relatively weak, declining during the first half of the week before recovering marginally on Friday. The divergence between LME and SHFE price movements highlighted mixed regional demand signals, with global supply concerns supporting LME zinc while Chinese market sentiment remained more cautious.
Overall, the zinc market remained supported by tightening exchange inventories and firm nearby market conditions. However, the divergence between strong LME and MCX performance and weaker SHFE prices suggested that demand recovery remained uneven across regions.
Outlook
BigMint expects LME zinc prices to remain firm but volatile in the near term, with continued exchange inventory drawdowns providing underlying support. However, the sharp recovery during the week may increase the possibility of profit-booking, particularly if fresh buying interest weakens at higher price levels.
Immediate support is expected around the $3,590-3,610/t range, while resistance is seen near $3,650-3,700/t. Inventory movements, Chinese demand, the cash-to-three-month spread, global macroeconomic developments, and the pace of physical buying will remain key indicators for zinc’s near-term price direction.
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