LME zinc eases w-o-w amid profit booking despite continued inventory drawdown

• Sustained stock decline signals underlying supply tightening
  
  
• Buying activity remains cautious at elevated price levels
  
  

London Metal Exchange (LME) zinc prices witnessed a mild correction in the week ended 11 April 2026, following the previous week's strong rally, as profit booking emerged at higher levels. While prices softened on a w-o-w basis, the overall market tone remained supported by a continued drawdown in exchange inventories, indicating tightening visible supply. However, buying activity stayed largely need-based, limiting fresh upside momentum.

Price trends

LME trading resumed on 7 April after remaining closed on 6 April due to the Easter holiday. Zinc cash prices opened at $3,320/t and initially showed signs of stability before coming under pressure mid-week.

Cash prices declined to a weekly low of $3,256/t on 9 April, reflecting profit booking after recent gains. However, prices recovered towards the end of the week, closing at $3,297/t on 10 April, indicating some resilience at lower levels.

On a w-o-w basis, prices registered a marginal decline of around 1-1.5%, compared with the previous week's elevated closing levels, suggesting consolidation after the recent uptrend.

The three-month contract followed a similar trajectory. Prices eased from $3,323/t on 7 April to a low of $3,285/t, before rebounding to close at $3,313/t on 10 April. The forward curve remained relatively firm, indicating stable near-term sentiment despite short-term price correction.

Inventory analysis

LME zinc inventories continued their downward trajectory during the week, reinforcing the underlying supportive market structure. Stocks declined steadily from 113,925 t on 7 April to 111,925 t by 10 April.

On a w-o-w basis, inventories fell by around 1.7%, marking another week of consistent drawdown. The absence of significant inflows and continued withdrawals from warehouses suggest tightening visible supply, which helped cushion the downside in prices.

MCX zinc trends (6-10 April)

On the Multi Commodity Exchange (MCX), zinc futures displayed a relatively firm trend despite global price correction. The April contract opened at INR 323,000/t on 6 April and gained momentum during the week.

Prices peaked at INR 333,350/t on 8 April before moderating slightly, closing at INR 331,000/t on 10 April, reflecting a healthy w-o-w gain.

Open interest increased from 1,795 lots at the beginning of the week to 1,985 lots by 10 April, indicating fresh long build-up. Trading volumes remained robust, pointing to active market participation.

Domestic demand conditions were largely stable, with buying continuing on a need-based basis amid elevated price levels.

SHFE zinc trend

On the Shanghai Futures Exchange (SHFE), zinc prices remained largely range-bound with a slight upward bias. Prices moved from $3,403/t on 6 April, dipped mid-week, and later rose to $3,421/t on 10 April.

The overall stability in SHFE prices suggests steady demand conditions in China, although buying interest remained measured, in line with global trends.

Outlook

In the near term, LME zinc prices are expected to trade in a narrow range, supported by ongoing inventory drawdowns and firm underlying fundamentals. However, intermittent profit booking and cautious buying activity may cap sharp upside.

Prices are likely to find support in the $3,240-3,260/t range, while resistance is expected around $3,330-3,380/t. Market participants will continue to closely monitor inventory movements and demand signals for clearer directional cues.