Zinc On MCX Settled Up 0.22% At 162.3

Zinc on MCX settled up 0.22% at 162.3 tracking rise in LME prices up by 0.8 percent at $2,525 a tonne as steel prices lent support, helping it to recoup most of the week's losses. 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. ILZSG reported Wednesday deficit in global zinc market expanded to 92,400 tonnes in April 2017. Supply in March is revised to 72,700 tonnes deficit. Global zinc supply deficit was 112,000 tonnes during January-April, compared to 20,000 deficit in the same period of last year. Global zinc ore output increased to 4,269,000 tonnes during January-April, up 7% year-on-year. Zinc inventories at consumers, producers and bourses fell to 1,260,400 tonnes in April, down from 1,355,100 tonnes in March, ILZSG said.

National Bureau of Statistics (NBS) data showed China’s zinc output fell 9.9% on a yearly basis to 481,000 tonnes in May. China’s zinc output was 2.439 million tonnes in the first five months of this year, a drop of 1.7% year-on-year. Technically market is under short covering as market has witnessed drop in open interest by -1.91% to settled at 4221 while prices up 0.35 rupees, now Zinc is getting support at 161.4 and below same could see a test of 160.5 level, And resistance is now likely to be seen at 163.4, a move above could see prices testing 164.5.

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Suhani Verma

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