LME zinc prices decline w-o-w amid profit booking; inventories continue downtrend

• Sustained stock drawdowns fail to offset weak sentiment
  
  
• Chinese market remains cautious, SHFE prices decline
  
  

London Metal Exchange (LME) zinc prices fell in the week ended 1 May 2026, as profit booking at higher levels weighed on the market despite continued drawdowns in exchange inventories. Prices softened w-o-w, with buying activity remaining largely need-based amid cautious sentiment.

Price trends

LME zinc prices opened the week on a weaker note, with cash prices at $3,444.5/t on 27 April. The market remained volatile in the initial sessions, declining sharply to $3,365/t on 28 April before witnessing a brief recovery.

Prices slipped to a weekly low of $3,331/t on 29 April, followed by a mild rebound to $3,363/t on 30 April. However, the downward bias persisted towards the end of the week, with prices closing at $3,349/t on 1 May.

On a w-o-w basis, cash prices declined by around 3-4%, indicating a pause in the previous uptrend amid profit booking and subdued fresh buying interest.

The three-month contract followed a similar trend, easing from $3,435/t at the start of the week to $3,343/t by 1 May, reflecting softer forward sentiment.

Inventory analysis

LME zinc inventories continued to decline during the week, offering underlying support to the market.

Stocks reduced from 101,025 t on 27 April to 96,250 t by 1 May, marking a net drawdown of nearly 4,800 t over the week.

Although inventories registered a brief uptick mid-week, the overall trend remained downward, indicating ongoing tightening in visible supply. However, the pace of decline was relatively moderate compared to previous weeks, limiting stronger bullish momentum.

MCX zinc trends (27 April-1 May)

On the Multi Commodity Exchange (MCX), zinc futures mirrored global cues and exhibited a weak trend.

The May contract opened at INR 351,000/t on 27 April and gradually declined through the week, hitting a low of INR 338,200/t on 29 April. Prices recovered marginally thereafter, closing at INR 343,400/t on 1 May.

Open interest increased from 1,894 lots at the beginning of the week to 2,174 lots by the end, indicating fresh short build-up in the market.

Trading volumes remained moderate, while domestic demand continued to be driven by need-based buying amid price volatility.

SHFE zinc trend

On the Shanghai Futures Exchange (SHFE), zinc prices showed a downward trend during the week.

Prices started at $3,487/t on 27 April and moved within a narrow range before declining sharply towards the end of the week, closing at $3,421/t on 1 May.

The movement suggests cautious sentiment in the Chinese market, with no strong demand-side trigger supporting prices.

Outlook

In the near term, LME zinc prices may remain under pressure amid cautious buying and profit booking at higher levels.

While continued inventory drawdowns could provide some downside support, the absence of strong demand momentum may cap upside potential. Prices are likely to find support in the $3,300-3,320/t range, while resistance is seen around $3,380-3,420/t.

Market participants are expected to closely track inventory trends and macro cues for clearer directional signals.