Zinc on MCX settled up 0.67% at 181.20 as support seen after LME Zinc prices jumped 1.6 percent to $2,757 a tonne, its highest level in a week after weaker dollar and stronger global risk appetite despite the likelihood the Fed will raise rates on March 15. In the physical market, premiums continued to strengthen last week in the USA due to the strike at Noranda Income Fund’s zinc processing facility in Canada, which is tightening available supply.
In Asia, premiums were stable amid little buying interest but may weaken in the near term if availability eases in the USA, as evidenced by the pick-up in cancelled warrants in New Orleans. In Europe, premiums were steady amid ample availability. Meanwhile visible stocks, which remain elevated by historical norms, have barely moved so far this year. This suggests that the global supply/demand balance has not tightened recently.
Also LME zinc stocks – at 383,250 tonnes as of March 10 – are little changed (-850 tonnes) so far in March (including a fall of 3,200 tonnes last week) after falling 11,975 tonnes or 3% in February. In the year to date, stocks are down 44,600 tonnes or 10% after dropping roughly 35,000 tonnes or 8% in 2016. Now investors will also keep an eye out for headlines coming out of a two-day meeting of G20 central bankers and finance ministers in Germany for further hints on the strength of the global economy and the future direction of monetary policy.
Technically market is under fresh buying as market has witnessed gain in open interest by 3.36% to settled at 4642 while prices up 1.2 rupees, now Zinc is getting support at 180.1 and below same could see a test of 179.1 level, And resistance is now likely to be seen at 182.7, a move above could see prices testing 184.3.