MCX Zinc under fresh selling; Support seen at 182.9

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Technically Zinc market is under fresh selling as market has witnessed gain in open interest by 5.74% to settled at 3207 while prices down 3.65 rupees.

Now MCX Zinc is getting support at 182.9 and below same could see a of 181.2 levels, and resistance is now likely to be seen at 186.9, a move above could see prices testing 189.2. 

Zinc on MCX settled down 1.94% at 184.4 as downstream demand remained weak, as evidenced by falling spot premiums together with expectations of a better-supplied market.

However, downside seen limited after Nyrstar said it shut down its zinc-lead smelter furnace in Port Pirie, Australia, after an incident.  ’s industrial production and retail sales grew at weaker pace in , suggesting a further loss of momentum in the world’s second-largest economy. China’s industrial output growth eased to 4.8 percent in from 6.3 percent in .

Output was forecast to expand 6 percent. Likewise, growth in retail sales slowed to 7.6 percent from 9.8 percent a month ago. This was the weakest growth in three months. Elsewhere, German shrank 0.1 percent sequentially in the second quarter and Eurozone growth halved in the second quarter, as initially estimated, raising concerns about the state of the global economy.

Social inventories of refined zinc across Shanghai, Tianjin and Guangdong decreased over the weekend, as downstream consumers ramped up purchases after prices tumbled. Data showed that the stocks declined 6,300 mt from Friday August 9 and 3,500 mt from Monday August 5 to stand at 142,400 mt as of Monday August 12. Respective stocks in the three regions all fell over the weekend.

Trading Ideas:
–Zinc trading range for the day is 181.2-189.2.
–Zinc dropped as downstream demand remained weak, as evidenced by falling spot premiums together with expectations of a better-supplied market.
–However, downside seen limited after Nyrstar said it shut down its zinc-lead smelter furnace in Port Pirie, Australia, after an incident.
–China’s industrial production and retail sales grew at weaker pace in July, suggesting a further loss of momentum in the world’s second-largest economy.

Courtesy: Kedia Commodities

Source: Commodityonline.com