Zinc On MCX Settled Up 0.41%

Zinc on MCX settled up 0.41% at 170.25 as support seen after Shanghai zinc inventories fell to their lowest in more than two years at 91,749 tonnes. Prices also seen supported after imports of the metal into China rose, underlining potential shortages. Imports of refined zinc to China increased 21 per cent in April to 47,469 tonnes year-on-year while shipments of ore and concentrates jumped 44 per cent, customs data showed. Industry sources said that China is stepping up imports as dwindling global supplies of concentrate following mine closures hit local output of the metal.

Zinc spot premiums in Guangdong contracted rapidly due to increased supplies. Spot premiums on zinc in Guangdong contracted from 300-350 yuan per tonne last week to around 200 yuan per tonne against front month zinc contract on the Shanghai Futures Exchange (SHFE. Spot premiums fell from 270 yuan per tonne in the morning trading to around 150 yuan per tonne later the day on May 25.

The National Bureau of Statistics (NBS) data show China’s zinc production fell 5.6% year-on-year to 474,000 tonnes in April. China’s zinc production during the first four months of 2017 totaled 1.958 million tonnes, up 0.7% year-on-year. WBMS reported global zinc market witnessed 86,000 tonnes of surplus during January-March. World’s zinc market was in a 235,000 tonnes of deficit in 2016. 

Global zinc inventories fell 39,000 tonnes, according to WBMS March report. LME zinc inventories decreased 13,000 tonnes in March, with those in late March down 57,000 tonnes compared to late 2016. Technically now Zinc is getting support at 169 and below same could see a test of 167.6 level, And resistance is now likely to be seen at 171.3, a move above could see prices testing 172.2.

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Suhani Verma

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