LME zinc prices firm up on tight inventories

• Zinc inventories remain tight at under 2 days’ global consumption
• Holiday caution around infra, galvanising demand weighs on prices

Zinc prices on the London Metal Exchange (LME) edged higher in the week ended 2 January 2026, stabilising after year-end consolidation. Prices found support from light dip-buying and structurally tight inventories, despite holiday-thinned liquidity and mixed macro signals from China tempering aggressive upside.

Market participants monitored ongoing LME stock levels against persistent Chinese destocking, with refined zinc exports from the country expected to moderate amid narrowing SHFE-LME arbitrage.

Price trends

LME zinc cash prices gained roughly 1.6% to $3,106/t by 2 January from about $3,056/t on 29 December. The three-month contract rose 1.36% to $3,130/t from $3,088/t. Values consolidated above late-November lows near $2,992/t but remained below the mid-December peak near $3,220/t, reflecting holiday caution around infrastructure and galvanising demand.

Inventory analysis

LME zinc stocks dipped by 0.2% to 106,325 t on 2 January from 106,550 t on 29 December. Absolute tonnages remain historically tight at under two days’ global consumption, though volumes have increased from early-December lows. Stocks are up a sharp 104% from 52,000 t, as recorded on 1 December 2025.

MCX zinc trends

On the MCX, zinc futures (30 January 2026) traded between INR 304,000-309,000/t, rising 1.2% to INR 308,050/t on 2 January from INR 304,250/t on 29 December. Intraday strength reflected LME alignment and steady galvanising demand, though holiday volumes thinned.

SHFE zinc trend

On the Shanghai Futures Exchange, the February 2026 contract fluctuated around RMB 23,000/t, up 1% w-o-w from late-December levels. Declining social inventories and tight concentrates supported prices, while SHFE-LME spreads near parity curbed exports, balancing domestic demand.

HZL posts record mined metal output in Q3, 9M of FY’26

Hindustan Zinc delivered its highest-ever Q3 and nine-month mined metal output in FY’26, led by higher ore production, improved grades, and operational efficiencies. Q3 mined metal rose 4% y-o-y to 276,000 t, while 9MFY26 output hit a record 799,000 t, marking the best performance since the underground mining transition.

Outlook

Zinc markets gained 1-2% in early January, with future trends hinging on LME stocks near 100,000 t, Chinese restocking post-holidays, and macroeconomic data. Tight mine concentrates should sustain dip-buying support.