Zinc On MCX Settled Down -0.95% - Ways2Capital

Zinc on MCX settled down -0.95% at 156.8 as trade entered the northern hemisphere summer lull and markets waited on China data for fresh directional cues. Some Chinese zinc smelters will undertake maintenance cycle in June, and will hurt zinc production. About 15,000 tonnes of zinc output will be affected after maintenance at these smelters. Some zinc smelters that conducted maintenance in May have yet to resume production.

Growth in China’s refined zinc output will be lower than expected in June. Discounts of imported zinc over domestic zinc expanded on June 6. The price spread on zinc expanded 50 yuan per tonne between Shanghai and Tianjin on June 7 compared to June 6, with zinc prices in Tianjin 100 yuan per tonne above Shanghai prices. Combined zinc inventories in Shanghai, Tianjin and Guangdong decreased 8,000 to 129,100 tonnes this past week, down for over three months in a row.

Arriving shipments grew slightly, but outward shipments received a boost as trading improved in the latter half of the week. Zinc consumption in Tianjin also picked up after environmental protection push. Also Investor optimism about the pace of U.S. interest rate hikes over the longer-term, however, has been pegged back recently, as investors question whether recent economic data has deterred the Federal Reserve from its view that two additional rate hikes this year are appropriate.

Technically market is under fresh selling as market has witnessed gain in open interest by 9.7% to settled at 5449 while prices down -1.5 rupees, now Zinc is getting support at 155.6 and below same could see a test of 154.2 level, And resistance is now likely to be seen at 158.9, a move above could see prices testing 160.8.

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Suhani Verma

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