Zinc On MCX Settled Up

Zinc on MCX settled up 0.38% at 184.35 as broader investor sentiment revived as disruptions piled up in the zinc market. Noranda Income Fund said zinc output at its Quebec plant, the second-largest in North America, was at 50-60 percent of normal operating levels as a five-and-a-half week long strike dragged on. 

Zinc has doubled in price since it hit bottom in January of last year. As prices climbed, many buyers probably made the mistake of thinking prices were too high, missing this spectacular rally. The tightening in zinc’s raw material segment accelerated last year thanks to the closure of big mines such as Century, Lisheen and Glencore‘s suspension of 500,000 mt of annual mine capacity.

LME zinc stocks currently stand just below 400,000 mt, much lower than the 1.2 million mt reported in 2013. In addition, it has been reported that more than 100,000 mt of exchange stocks were cancelled over the past two weeks. That leaves a remaining open tonnage of around 200,000 mt, the lowest since December 2008. 

Another sign that tightness in the raw materials market is feeding through into the refined metal part of the supply chain. The zinc market was in deficit in 2016, even though demand was modest, while fundamentals remain positive and global zinc demand is expected to grow 2.5% in 2017. Mine closures and cutbacks led the market into deficit last year, however "producers may require some further restraint in order for the deficit to be repeated in 2017.

Technically market is under short covering as market has witnessed drop in open interest by -5.14% to settled at 4112, now Zinc is getting support at 182.8 and below same could see a test of 181.2 level, And resistance is now likely to be seen at 185.5, a move above could see prices testing 186.6.

For Quick Trial – 8962000225 ✔
or mail us here: info@ways2capital.com
✆ - 0731-6626222 | Toll Free - 1800-3010-2007
Give a Missed Call for Free Trial - 09699997717


Suhani Verma

  • Image
  • Image
  • Image
    Blogger Comment
    Facebook Comment