Zinc on MCX settled up 1.5% at 186.65 as support seen after the update that Brazilian group Votorantim has halted operations at its zinc smelter Cajamarquilla in Peru as a precaution amid flooding and mudslides that have disrupted transportation and restricted running water in the Andean country. The company told that it was carrying out maintenance work to restart operations as soon as weather conditions allow.
It declined further comment. Peru, the world's third-biggest producer of zinc and second-largest copper producer, is bracing for another month of flooding after a sudden warming of Pacific waters off Peru's coast unleashed deadly downpours in recent weeks. A railway that moves about half of the zinc produced in Peru to port has been suspended after it was damaged by floods, the government said Monday.
On Tuesday, zinc and silver producer Volcan declared force majeure on its mineral deliveries. Peruvian miner Buenaventura has been stockpiling zinc concentrates at its polymetallic mine Brocal in the central Andes instead of sending them to the port while it waits for the railway to be repaired, the company's chief financial officer told. Now market players will focus on a handful of Fed speakers in the week ahead, including Chair Janet Yellen on Thursday, as they look for more clues on the timing of the next U.S. rate hike.
Technically market is under short covering as market has witnessed drop in open interest by -11.78% to settled at 4778 while prices up 2.75 rupees, now Zinc is getting support at 184 and below same could see a test of 181.4 level, And resistance is now likely to be seen at 188.1, a move above could see prices testing 189.6.