Zinc On MCX Settled Down -0.72%

Zinc on MCX settled down -0.72% at 171.30 and prices opened with a gap down after Moody's downgraded China's credit ratings for the first time in 30 years, raising concerns about demand in the world's largest consumer of industrial metals, but a drop in Zinc prices was limited and prices recovered from the day's low after the update from International Lead and Zinc Study Group (ILZSG) which showed that the global zinc and lead markets fell into a deficit in March after surpluses in February.

Earlier in the this week Zinc prices hit a three-week peak after imports of the metal into top consumer China rose, underlining potential shortages. Imports of refined zinc to China increased 21 percent in April to 47,469 tonnes year-on-year while shipments of ore and concentrates jumped 44 percent, customs data showed.

Industry sources said that China is stepping up imports as dwindling global supplies of concentrate following mine closures hit local output of the metal, used to galvanise steel. Now in the week ahead, investors after Wednesday’s Federal Reserve meeting minutes will be looking at revised data on U.S. first quarter growth and private sector survey data out of the euro zone will also be in focus.

Technically market is under long liquidation as market has witnessed drop in open interest by -15.89% to settled at 4548 while prices down -1.25 rupees, now Zinc is getting support at 170 and below same could see a test of 168.6 level, And resistance is now likely to be seen at 172.4, a move above could see prices testing 173.4.

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Suhani Verma

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