Zinc Settled Flat On Profit Booking But Still

Zinc settled flat on profit booking but still prices ended with gains on weekly basis as supplies were still insufficient. China's factories grew at the quickest pace in three months in June, buoyed by strong new orders in a sign of stabilising growth, though analysts expect a further slowdown in the world's second-biggest economy is inevitable as Beijing cracks down on debt risks. Public Procurement Service (PPS) announced bid solicitation again on its website June 29 for 2,000 tonnes of zinc, which will end on June 4. Shipments are due on September 15, to Port of Busan.

Zinc provided is required to be produced in the same country and registered on the LME. Japan’s Ministry of Finance reported June 29 the country’s zinc exports increased 1.4% year-on-year to 6,232,401 kg in May. Total zinc exports by Japan declined 17.8% year-on-year to 30,980,045 kg in the first five months of this year. Premiums shrank 30-120 yuan per tonne over July zinc on the SHFE in Shanghai. zinc traded 20 yuan per tonne below or 200 yuan per tonne above SHFE July zinc.

Premiums in Guangdong shrank from 30-50 yuan per tonne to discounts of 30-50 yuan per tonne. Combined zinc inventories in Shanghai, Tianjin and Guangdong increased 1,200 to 121,200 tonnes last week. Inventories in both Shanghai and Guangdong grew, while those in Tianjin declined. The drop in inventories in Tianjin is due to fewer arriving shipments from Zijin Mining and dip-buyers.

Technically market is under fresh buying as market has witnessed gain in open interest by 51.71% to settled at 7869, now Zinc is getting support at 177.3 and below same could see a test of 175.8 level, And resistance is now likely to be seen at 180, a move above could see prices testing 181.2.

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Suhani Verma

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