LME zinc extends gains w-o-w amid firm fundamentals, declining inventories

• Prices remain above $3,550/t despite volatility
  
  
• Steady buying interest underpins market sentiment
  
  

London Metal Exchange (LME) zinc prices remained firm during the week ended 5 June 2026, supported by improving market sentiment, declining exchange inventories, and sustained strength across the broader base metals complex. Although prices witnessed some volatility during the week, zinc continued to trade above key support levels as market participants monitored inventory movements and evolving demand conditions.

Price trends

LME zinc cash settlement prices opened the week at $3,555/t on 1 June and strengthened steadily during the initial sessions. Prices increased to $3,612/t on 2 June and further to a weekly high of $3,624.5/t on 3 June amid improved buying interest and supportive market sentiment.

The market witnessed some profit-booking during the latter half of the week, with cash settlement easing to $3,564/t on 4 June before recovering to close at $3,575/t on 5 June.

On a w-o-w basis, LME zinc cash prices increased by around 0.7% from $3,549/t recorded on 29 May, reflecting continued resilience despite volatile intra-week trading.

The three-month contract followed a similar trajectory, rising from $3,577/t on 1 June to a weekly high of $3,639.5/t on 3 June before settling at $3,594.5/t on 5 June. The firm forward curve suggests market participants remain constructive on near-term zinc fundamentals.

Inventory analysis

LME zinc inventories declined during the week, providing additional support to market sentiment.

Stocks stood at 113,300 t on both 1 and 2 June before easing to 112,525 t on 3 June. The downward trend continued through the remainder of the week, with inventories declining to 111,900 t on 4 June and further to 110,950 t on 5 June.

The consistent drawdown in exchange inventories indicates tightening visible availability and reinforces expectations of balanced supply-demand conditions in the near term.

MCX zinc trends (1-5 June)

On the Multi Commodity Exchange (MCX), zinc futures traded firm during the first half of the week before witnessing profit-booking towards the close.

The June contract opened at INR 367,700/t on 1 June and strengthened sharply to INR 373,600/t on 2 June. Prices remained elevated on 3 June at INR 373,300/t before easing marginally to INR 371,750/t on 4 June.

Selling pressure intensified on 5 June, with the contract declining to close at INR 365,000/t. Despite the late-week correction, prices remained broadly supported by firm global trends during most of the reporting period.

Open interest increased from 2,583 lots on 1 June to a weekly high of 2,916 lots on 3 June before declining to 2,627 lots by 5 June, indicating a combination of fresh participation early in the week followed by profit-booking at higher levels.

Trading volumes remained active throughout the week, while domestic buyers largely continued need-based procurement amid elevated zinc prices.

SHFE zinc trend

On the Shanghai Futures Exchange (SHFE), zinc prices traded in a relatively stable range during the week before strengthening sharply towards the close.

SHFE zinc stood at $3,532/t on 1 June and increased to $3,563/t on 2 June. Prices softened slightly to $3,538/t on 3 June before recovering to $3,562/t on 4 June. Buying momentum improved significantly on 5 June, pushing prices to $3,607/t.

The stronger finish suggests improving sentiment in the Chinese market and may provide additional support to global zinc prices in the near term.

Outlook

BigMint expects LME zinc prices to remain supported by declining exchange inventories, resilient broader market sentiment, and balanced supply-demand fundamentals. However, elevated price levels and cautious downstream procurement may continue to limit aggressive upside momentum.

Prices are likely to find support in the $3,540-3,560/t range, while immediate resistance is seen around $3,650-3,700/t. Market participants are expected to closely monitor inventory trends, Chinese demand indicators, and broader macroeconomic developments for further direction.