- Prices recover after mid-week volatility; inventories extend decline
- MCX rallies to weekly high, while SHFE edges up on improving sentiment
London Metal Exchange (LME) zinc prices advanced during the week ended 10 July 2026, supported by continued declines in exchange inventories and renewed buying interest despite intermittent volatility. Market participants remained cautious amid evolving macroeconomic developments; however, tightening warehouse stocks and resilient physical demand helped prices finish the week above the previous Friday’s close.
On a w-o-w basis, LME zinc cash settlement prices increased 1.6% to $3,602/t on 10 July from $3,546/t recorded on 3 July. Prices traded within a relatively broad range during the week, with early gains giving way to a sharp correction before recovering on the back of improving market sentiment and sustained inventory drawdowns.
Price trends
LME zinc cash settlement prices opened the week at $3,599/t on 6 July before easing to $3,560/t on 7 July. Prices slipped further to a weekly low of $3,529/t on 8 July as profit-booking and cautious sentiment across the broader base metals complex weighed on the market.
Buying interest strengthened during the latter half of the week, lifting prices sharply to a weekly high of $3,622/t on 9 July before settling marginally lower at $3,602/t on 10 July.
The three-month contract broadly mirrored movements in the cash market. Prices stood at $3,582/t on 6 July before easing to $3,562/t on 7 July and $3,537/t on 8 July. The contract subsequently rebounded to $3,615/t on 9 July before settling at $3,588/t by week-end, reflecting resilient forward market sentiment despite short-term price fluctuations.
Inventory analysis
LME zinc inventories continued to trend lower throughout the reporting week, highlighting sustained warehouse outflows and improving physical market fundamentals.
Stocks declined from 118,675 t on 3 July to 118,425 t on 6 July before falling further to 116,350 t on 7 July and 115,925 t on 8 July. The downtrend extended through the remainder of the week, with inventories easing to 115,525 t on 9 July and 114,800 t on 10 July.
Overall, exchange inventories declined by 3,875 t w-o-w. The persistent drawdown in warehouse stocks continued to underpin market sentiment, indicating that physical demand remained sufficiently firm to absorb available supplies despite periods of price volatility.
MCX zinc trends (6-10 July)
On the Multi Commodity Exchange (MCX), zinc futures strengthened during the reporting week, largely tracking firm overseas cues and improving domestic buying interest.
The July contract settled at INR 370,800/t on 6 July before easing to INR 368,100/t on 7 July and edging higher to INR 368,800/t on 8 July. Strong buying momentum emerged during the latter half of the week, pushing prices to INR 375,900/t on 9 July before closing at a weekly high of INR 376,350/t on 10 July.
Open interest remained largely range-bound through the week, ending at 2,766 lots compared with 3,080 lots at the beginning of the week. The movement suggested selective participation, with price gains being driven primarily by need-based buying and improved market sentiment rather than aggressive build-up of fresh long positions.
Domestic consumers largely continued with calibrated procurement, closely tracking international price movements while replenishing inventories on a need basis.
SHFE zinc trends
On the Shanghai Futures Exchange (SHFE), zinc prices edged higher during the reporting week as improving sentiment offset concerns over the pace of downstream demand recovery.
SHFE zinc stood at $3,396/t on 6 July before remaining largely stable at $3,394/t on 7 July. Prices subsequently strengthened to $3,420/t on 8 July and further to $3,453/t on 9 July before easing marginally to $3,450/t on 10 July.
The gradual recovery reflected improved confidence across the Chinese market, although downstream purchasing remained measured amid seasonal demand softness and continued macroeconomic uncertainty.
Market updates
Market sentiment remained cautiously optimistic during the week. Continued declines in LME warehouse inventories reinforced expectations of a tightening physical market, while improved buying interest towards the latter half of the week supported a strong recovery in prices following the mid-week correction.
The rebound in MCX zinc reflected healthy domestic participation, supported by firm global cues and need-based procurement from consumers. Meanwhile, Chinese market participants remained focused on downstream demand from the galvanising and manufacturing sectors, with selective buying continuing to underpin SHFE prices despite lingering concerns over the broader industrial outlook.
Overall, the combination of declining exchange inventories, resilient physical demand and improved investor sentiment enabled LME zinc to comfortably reclaim and hold above the $3,600/t level by the end of the reporting week.
Outlook
BigMint expects LME zinc prices to remain supported in the near term, aided by continued exchange inventory drawdowns and steady physical demand. However, broader macroeconomic developments, movements in the US dollar, and evolving investor sentiment are likely to continue driving short-term volatility.
Immediate support is expected around the $3,560-3,580/t range, while resistance is seen near $3,630-3,680/t. Inventory movements, Chinese downstream demand, and developments across the global base metals complex will remain key indicators for zinc’s near-term price direction.
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