A modest rebound on supply pressure alone

By Siam Sukkhee Trading Co., Ltd — 2026-10-18 — Bing News — zinc price LME

You've got to read SHFE zinc on its own terms. On October 16, the most-traded 2612 contract opened at 25,390 yuan/mt and drifted higher—hitting 25,595 at its peak, closing out at 25,440. Up 65 yuan. Or 0.26 percent. The charts made a bullish candlestick. Everything looked fine.

Modest rebound. Nothing more.

The numbers told you why. Trading volume climbed to 48,690 lots, open interest up 2,268 to 105,000. The lower Bollinger Band provided support—a technical gesture, more or less. But what actually mattered was happening in the physical market.

Downstream buyers had been stung by the earlier price collapse and now they were hunting at lower levels. When that happens in zinc, inventories move. Domestic zinc ingot inventory destocked slightly. Not dramatically. Slightly. That's the reality of a thin market.

But here's the thing—actually, that's not quite right. Let me be precise. The real floor beneath prices came from the supply side. TCs (treatment charges) remained crushed, which meant smelters operated under profit pressure and showed almost no appetite to expand production. Weak enthusiasm. That matters because weak enthusiasm from suppliers keeps cash prices from collapsing entirely, even when demand sits dormant.

You look at SHFE zinc and you see weakness supported by weakness. Downstream buying barely there. Smelter interest barely there. Nothing robust about it. Just enough production caution to keep things from sliding further.

The rebound was technical. The support was structural.

Source: Shanghai Metals Market (SMM)

Tags: copper market Southeast Asia