Zinc On MCX Settled Down -1% At 163.05

Zinc on MCX settled down -1% at 163.05 as China's latest moves to curb shadow banking and risky investment dented the growth outlook in China. After clocking 6.9 percent in the first quarter thanks to spending on infrastructure and a property boom that policymakers want to rein in, analysts surveyed by Reuters reckon 2017 economic growth will just about make Beijing's target of 6.5 percent as it slows over the rest of the year. China's growth is set for its weakest patch since the global financial crisis as authorities pull back on stimulus.

China's banking regulator tightened disclosure rules on lenders' wealth management products. Separately, the China Banking Regulatory Commission unveiled plans to publish a flurry of regulations later this year to control financial risks. Continuous inflows of imported zinc arrived in Shanghai in the week, consisting of Spanish and Indian brands. Arriving shipments are expected to be nearly 10,000 tonnes. Inflows of imported zinc in the market weighed down spot premiums of domestic brands in Shanghai market.

Spot premiums of domestic zinc narrowed from 300 yuan per tonne from late April to 250 yuan per tonne. China’s refined zinc production fell to 413,000 tonnes in April 2017, a drop of 3.95% month-on-month and 5.92% year-on-year. Total refined zinc output in the first four months of the year was 1.711 million tonnes, a fall of 1.84% on a yearly basis. Lower zinc prices and domestic zinc concentrate TCs ate into profit at domestic zinc smelters.

Technically market is under fresh selling as market has witnessed gain in open interest by 8.38% to settled at 3751, now Zinc is getting support at 161.6 and below same could see a test of 160.1 level, And resistance is now likely to be seen at 164.3, a move above could see prices testing 165.5.

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Suhani Verma

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