- Hindustan Zinc releases Q2FY’26 business update
- MCX zinc prices witness an increase of 2.09%
The London Metal Exchange (LME) Zinc market ended Week 39 on a strong note, continuing its upward trajectory amidst significantly tightening global inventory and increased market optimism. While prices saw fluctuations throughout the week, they closed substantially higher, driven by strong fundamentals and positive sentiment.
Price trends
LME Zinc cash-settlement prices trended significantly higher, showing a robust upward movement of approximately 1.76% from the open of $2,974.50/t on September 29th to the closing price of $3,027.00/t on October 3rd. The increase was fueled by falling inventories, supply concerns, and broader global factors. The three-month LME Zinc contract mirrored this pattern, starting at $3,004.50/t on September 29th and closing at $3,009.5/t on October 3rd.
Inventory analysis
LME zinc inventories continued their declining trend during the week, reaching critically low levels. LME stocks were at 41,950 t on September 29th and had fallen to 40,350 t by October 3rd. This continuous destocking, with LME inventories slumping to their lowest levels since May 2023, indicates a tightening global supply of readily available zinc and provided strong support for prices. In China, inventories also showed a slight decline.
MCX zinc trends (29 September – 3 October)
MCX Zinc prices experienced an upward trend, aligning with the recovery in global markets and showing a 2.09% increase from INR 288,250/t on September 29th to INR 294,300/t on October 3rd. The Indian market benefited from the improving global macroeconomic sentiment and tightening LME inventories. However, instances of profit booking at higher price levels were also observed.
SHFE zinc trend
SHFE zinc prices remained volatile throughout the week. Although the most-traded SHFE zinc 2511 contract opened higher at 21,825 yuan/mt on September 30th, prices fluctuated despite support from tightening supply conditions in China. Persistent oversupply concerns and tepid domestic demand ultimately capped significant gains.
Zinc producers — key updates
Hindustan Zinc Ltd. released its Q2 FY26 business update on October 3rd, reporting mixed operational performance but strong financial results. Mined metal output increased 1% year-on-year, while saleable metal production saw a 6% year-on-year decrease. Revenue growth was positively impacted by firmer LME zinc prices.
Outlook
The near-term zinc outlook is cautiously optimistic. While strong support comes from tightening LME inventories and easing macroeconomic concerns, persistent oversupply issues in China and varying regional demand trends suggest continued volatility. Market participants will closely monitor Chinese demand trends, inventory movements, and broader global economic signals for further direction, as a clearer indication of a genuine pick-up in Chinese demand remains crucial.
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