Zinc On MCX Settled Up 2.27% - Ways2Capital

Zinc on MCX settled up 2.27% at 182.75 as traders continuous to hold long position as zinc prices continue to be well supported on the back of dwindling LME inventories. Yesterday Zinc on London market also gained amid expectations the metal's fundamentals had turned a corner, thanks to a robust outlook for Chinese steel. 

Chinese steel futures were up 1.26 percent after galloping more than 3 percent on Monday on firm demand in China and data showing a recovery in China's manufacturing activity. Zinc is used to galvanise, or rust-proof steel.LME Zinc was steady at $2,800 a tonne after hitting its highest price since April 6 overnight. The price is up more than 10 percent since June 7. 

Support seen as China's manufacturing sector reversed into growth mode in June, expanding at the fastest pace in three months after unexpectedly contracting in May, as new orders and production rose. While Zinc stocks in LME-approved warehouses at 289,275 are down more than 30 percent this year, while those monitored by the Shanghai Exchange have tumbled nearly 60 percent to less than 65,000 tonnes.

Macquarie expects a 650,000-tonne zinc shortfall this year and sees prices breaching $3,000 a tonne by the fourth quarter. Now in the week ahead, investors will be focusing on Wednesday’s minutes of the Fed’s latest meeting for fresh cues on the timing of the next U.S. rate hike. Friday’s U.S. jobs report for June will also be closely watched.Technically market is under fresh buying and getting support at 180.4 and below same could see a test of 178.1 level, And resistance is now likely to be seen at 183.9, a move above could see prices testing 185.1.

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Suhani Verma

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