Zinc On MCX Settled Down - Ways2Capital

Zinc on MCX settled down -1.22% at 158.3 tracking LME prices closed down 1 percent at $2,461 a tonne due to weak Chinese steel markets. 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. Prices for Indian and Spanish zinc were 120-100 yuan per tonne below June zinc on the SHFE, and those for SMC, AZ and YP zinc were 70-60 yuan per tonne below June zinc on the SHFE, with discounts of imported zinc widening 100 yuan per tonne over SHFE June zinc.

Support can be seen in today’s session as investors reduce risk before the major political and economic events later this week. With British elections, an ECB policy meeting where policymakers may take a less dovish stance, and former FBI director James Comey's Senate testimony on all set for Thursday, investors are wary of taking big positions in markets.

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 long liquidation as market has witnessed drop in open interest by -2.3% to settled at 4967 while prices down -1.95 rupees, now Zinc is getting support at 157 and below same could see a test of 155.8 level, And resistance is now likely to be seen at 160.5, a move above could see prices testing 162.8.

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Suhani Verma

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