Zinc On MCX Settled Up 3% At 163.15

Zinc on MCX settled up 3% at 163.15 as support seen after update 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 undertook maintenance in May. This affected some 35,000 tonnes of zinc output. Some zinc smelters that conducted maintenance in May have yet to resume production.

Zinc ingot inventories in Guangdong fell 6,200 tonnes to a record low of 26,000 this past week. With limited supplies from zinc smelters, goods available for delivery, which is due after 4 trading days, are still insufficient. Raw material inventories at Chinese zinc smelters increased recently as ore supplies grew. Zinc concentrate inventories at zinc smelters are sufficient to 37 days of production during late May-early June, up 6-7 days on the month.

The period of raw material inventories at a few smelters added 2-3 months. China’s refined zinc output was 407,000 tonnes in May, down 1.5% on the month and 10.4% year-on-year. Refined zinc production in the first five months of 2017 totaled 2.118 million tonnes, a drop of 3.6% year-on-year. US Commerce Department announced last Friday the country’s zinc imports doubled in April to 46,602,597 kg, and total imports in the first four months of 2017 were 162,005,076 kg.

Technically market is under short covering as market has witnessed drop in open interest by -9.62% to settled at 4181 while prices up 4.75 rupees, now Zinc is getting support at 159.9 and below same could see a test of 156.6 level, And resistance is now likely to be seen at 164.9, a move above could see prices testing 166.6.

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Suhani Verma

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