Tight Stocks and Weak Mine Output Lift Zinc to USD 3,856.990 Ahead of Fed Decision

Aditi Sarkar

28 October 2026 06:37 PM AEDT

Tight Stocks and Weak Mine Output Lift Zinc to USD 3,856.990 Ahead of Fed Decision

Image Source: Shutterstock

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Highlights

Zinc traded at USD 3,856.990, up 15.650 (+0.41%), during the session.
The session opened at USD 3,841.740 and reached a high of USD 3,864.090.
Zinc touched a session low of USD 3,835.390 on volume of 8.81K.
LME three-month zinc closed up about 2.1% at USD 3,821.50 per tonne on Monday, its highest since 12 October.
Global mine output fell 2.6% in the first half of 2026, while Shanghai Futures Exchange stocks dropped to their lowest since March.
Traders are watching support near USD 3,700 and USD 3,650 and resistance near USD 3,900 and USD 4,050.

Zinc edged 0.41% higher to USD 3,856.990 on 28 October 2026 as shrinking inventories and constrained mine supply supported buyers ahead of the Federal Reserve's policy decision. The session opened at USD 3,841.740 and ranged between USD 3,835.390 and USD 3,864.090, adding 15.650.

The advance recovers part of the ground lost in October and follows a stronger session for LME zinc.

Zinc Edges Higher Through the Session

Zinc held above USD 3,835.390 after opening at USD 3,841.740 and lifted to USD 3,864.090, leaving the latest price near the top of the range on volume of 8.81K. LME three-month zinc closed up about 2.1% at USD 3,821.50 per tonne on Monday, its highest since 12 October.

Image source: Tradingview chart, 28 October 2026

Shrinking Inventories Tighten Physical Supply

LME on-warrant stocks stood at 133,700 tonnes, while Shanghai Futures Exchange stocks fell 5% in the week to 137,139 tonnes, the lowest since March. Cash zinc traded at a premium of roughly USD 80 to USD 104 per tonne over the three-month contract, pointing to tightness in nearby supply.

Global mine output fell 2.6% in the first half of 2026, according to the International Lead and Zinc Study Group. Its refined balance moved from a 27,500-tonne surplus in July to a 3,900-tonne deficit in August.

Negative Treatment Charges Show Smelter Strain

Spot treatment charges stood at minus USD 115 to minus USD 150 per tonne on 9 October, against a 2026 benchmark of USD 85 per tonne, according to Fastmarkets, meaning smelters are effectively paying for feed. High power costs add to the squeeze on margins. LME cash zinc had closed at USD 4,107 per tonne on 27 August, its highest since mid-2022.

Fed Decision and Dollar Set the Macro Tone

The Federal Open Market Committee announces its decision on Wednesday at 14:00 ET. The Fed raised its target range to 3.75%-4.00% on 16 September, its first hike since July 2023. A poll of economists conducted between 16 and 20 October found 94 of 100 expecting no change, while all 100 expected a hike in December.

The 10-year Treasury yield was 5.146% and the dollar index 101.69 in late-October data. Higher yields and a firmer dollar can weigh on dollar-priced metals. Q3 GDP and September PCE inflation are due on 29 October.

Technical Outlook: Zinc

Zinc was quoted at USD 3,856.990, against an opening level of USD 3,841.740, a session high of USD 3,864.090 and a session low of USD 3,835.390. The change on the day stood at +15.650, or +0.41%.

Zinc has trended higher since mid-2025 and peaked above USD 4,000 in September before pulling back toward USD 3,650 in October. The recent bounce has recovered part of that decline, but prices remain below the September high. A sustained move higher would be needed before the recovery could be considered complete.

Key Levels to Watch

The nearest support zone sits near USD 3,700, followed by the area near USD 3,650, close to the October low. Resistance sits near USD 3,900, followed by the area near USD 4,050, close to the September peak. These are approximate levels rather than calculated pivots.

A hold above support would keep the October recovery intact, while a slip below it would reopen the pullback. A sustained move through USD 3,900 would be needed before the September peak comes into view.

Summary

Zinc rose 0.41% to USD 3,856.990 on 28 October 2026, supported by shrinking inventories, weaker mine output and deeply negative treatment charges. The Fed decision and 29 October data releases are next on the calendar, while support near USD 3,700 and resistance near USD 3,900 frame the near-term range.

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