Zinc on MCX settled down -0.77% at 187.50 despite prices on LME Zinc climbed 2.6 percent to end open outcry trading at $2,884 after LME data showed on-warrant inventories MZNSTX-TOTAL -- those not earmarked for shipment from warehouses and therefore available to investors -- slid 11 percent to 258,050 tonnes, the lowest since January 2009. Zinc has gained 10 percent this year on concerns that the closure and suspensions of big mines will create shortages.
Also support can be seen as Korea Zinc Inc said this month it plans to cut its refined zinc production by 7.7 per cent to just under 600,0000 tonnes this year due to low mine supply and reduced treatment charges. Also a strike at Noranda Income Fund's zinc processing plant in Quebec stretched into a 13th day on Friday, with no talks scheduled between management and the union, which will also cut metal supply. Meanwhile Global zinc stocks across the LME, China and the United States are now at their smallest since 2009 on a seasonal basis.
Available LME zinc stocks tipped below 200,000 tonnes last week for the first time since 2008, having halved over the past four months. In the week ahead, global financial markets will focus on U.S. President Donald Trump's address to Congress on Tuesday for further details on his promises of tax reform, deregulation and infrastructure spending. This week is also peppered with a handful of Fed appearances, most importantly Fed Chair Janet Yellen on Friday.
Investors will also be watching a revised reading of fourth-quarter U.S. growth to gauge the strength of the economy. Private sector survey data from the UK and euro zone inflation data will also be in focus. Technically market is getting support at 186.5 and below same could see a test of 185.4 level, and resistance is now likely to be seen at 188.6, a move above could see prices testing 189.6.