Bears Cut Production, LME Zinc Finds Its Floor

By Siam Sukkhee Trading Co., Ltd — 2026-10-19 — Bing News — zinc price LME

Last Friday zinc opened soft. Opened at $3,669 per tonne and looked ready to slide.

It didn't.

The move down stalled at $3,665—barely a tick—and then something shifted. The sort of thing that makes traders sit up. After that it wobbled around the daily average, tested overhead moving averages and then pulled back as profit-takers took their slices.

Small day, volumewise. Open interest tightened too. But the shape of the candle—bullish with a long upper wick—actually told you something. The market tried higher, couldn't hold it, but didn't want to surrender the gains either.

What's moving zinc at this level isn't complicated. The Fed Chairman (that's Warsh, for whoever's keeping score) refused to telegraph where rates go next, which peeled back expectations for an October hike, which weakened the dollar.

But underneath, actually, that's not quite right—the mechanical part only matters if supply stays tight. And it does. You don't bounce back from that quickly when energy costs stay where they are.

Inventory tells the rest of it. LME stocks climbed by 7,225 tonnes on October 15, reaching 151,050 tonnes—up nearly 5 percent. That sounds like it should pressure the market. But China's inventory fell by 4,400 tonnes as of late September, down to 202,100 tonnes. The two are moving in opposite directions. Destocking in the real world. Stockpiling on the exchange. That gap matters.

Across Shanghai, Guangdong, Tianjin and Ningbo, the story was the same: downstreamers who'd bought earlier now sat on inventory. They weren't chasing. Spot premiums actually ticked higher in Guangdong because of contract rollover, and traders moved metal actively, but downstream enthusiasm had already pulled back. The dip-buying that might've supported prices at lower levels had already happened. It was all mechanical now.

The forecast for this week was destocking continuing, which means the zinc market sits somewhere between a genuine technical floor—supported by the lower Bollinger Band where it is—and demand that's already wrung itself out at cheaper prices. Moving averages overhead still form resistance. Nothing is screaming at you to sell, but nothing's screaming at you to buy either. The middle ground, stretched tight.

Source: "Last Friday, LME zinc recorded a small bullish candlestick with a long upper shadow, with multiple moving averages above forming resistance and the lower Bollinger Band below providing support." — Shanghai Metals Market

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