Zinc On MCX Settled Up 1.35%

Zinc on MCX settled up 1.35% at 172.55 tracking firmness from LME Zinc has which 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. Yesterday LME Zinc closed up 1 percent at $2,658 a tonne after touching $2,669, the highest since May 2.

Speculation are high that the Chinese government is moving to curb zinc production. As part of a drive to reduce pollution across the country with potentially significant implications for supply and prices. Details on the China cuts are currently scarce. With sources in country noting only that the government is targeting steel mills that emit excessive pollution. That program to shut down polluting facilities reportedly also extends to zinc and nickel plants.

Raising the possibility those metals could see output fall, as older and outdated production is taken offline. Traders thus appear to be taking the new China zinc and nickel initiatives seriously. With both metals hitting their highest prices in nearly three weeks after the announcement of the anti-pollution program.

Technically market is under fresh buying as market has witnessed gain in open interest by 10.82% to settled at 5407 while prices up 2.3 rupees, now Zinc is getting support at 171 and below same could see a test of 169.5 level, And resistance is now likely to be seen at 173.3, a move above could see prices testing 174.1.

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Suhani Verma

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