Zinc On MCX Settled Down -0.66%

Zinc on MCX settled down -0.66% at 180.25 amid worries over tepid demand growth from top consumer China in the second half dragged on prices. China's central bank said the shadow banking sector lacks sufficient regulation and the bank would give more prominence to financial risk controls. China's services sector grew at a slower pace in June as new orders slumped, signalling renewed pressure on businesses and pointing to a softening outlook for the economy.

Subdued demand was behind the latest slowdown, as the new business sub-index weakened to 51.9 in June from May's 53.5, hitting its lowest since May 2016. Combined zinc inventories in Shanghai, Tianjin and Guangdong decreased 11,400 to 109,800 tonnes last week. Zinc inventories in both Shanghai and Tianjin fell, while those in Guangdong added. Supplies in Guangdong were steady.

Downstream buyers lacked buying interest since they had built some stocks previously. Inventories fell in Tianjin because of fewer arriving shipments from Zijin Mining. Besides, production at galvanizers recovered after environmental protection inspections in north China.

Technically market is under long liquidation as market has witnessed drop in open interest by -1.73% to settled at 8298 while prices down -1.2 rupees, now Zinc is getting support at 178.3 and below same could see a test of 176.3 level, And resistance is now likely to be seen at 182.1, a move above could see prices testing 183.9.

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Suhani Verma

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