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Wednesday, July 6, 2022

MCX Zinc under short covering; Support seen at 176.9

MCX Nickel likely to move in a range of 910.2-942.8

MCX Copper may move in a range of 411.9-425.7

MCX Natural Gas under fresh selling; Support seen at 189.5

MCX Crude Oil under fresh buying; Resistance seen at 4754

MCX Silver under short covering; Support seen at 38157

Technically Zinc market is under short covering as market has witnessed drop in open interest by 2.91% to settled at 6065 while prices up 0.3 rupees.

Now MCX Zinc is getting support at 176.9 and below same could see a test of 174.5 level, And resistance is now likely to be seen at 182.1, a move above could see prices testing 184.9.

Zinc on MCX settled up 0.17% at 179.35 recovering from lows on short covering amid plunging inventories. Zinc inventory in Shanghai Futures Exchange-approved warehouses plunged to a 10-year low after buyers took advantage of price declines and while supply remains restricted by local production cuts.

SHFE zinc inventory stood at 58,016 tonnes on Friday, the lowest since February 1, 2008. A net 38,941 tonnes of refined zinc has been withdrawn from SHFE-registered warehouses in just one month.

While the lower zinc prices have attracted buying activity, they have also had an impact on smelter profitability and operation rates. Falling refined zinc prices have stretched the margins of Chinese smelters even thinner, eventually prompting major producer Dongling to call for a 10% production cut across the industry in late June to support prices.

Various zinc smelters have extended their maintenance plans to reduce output and avoid inventory build-up. Shanghai bonded zinc stock at 156,000-161,000 tonnes as at the beginning of July, compared with 207,000-209,000 tonnes a month ago.

Zinc social inventory in Shanghai, Guangdong and Tianjin inched up nearly 700 mt from a week ago to 99,900 mt as downstream buyers hesitated to purchase. Inflows of imported materials in Shanghai were not as much as expected with buyers mostly taking a watch-and-wait stance on volatile zinc prices.

Trading Ideas:
–Zinc trading range for the day is 174.5-184.9.
–Zinc prices ended with gains recovering from lows on short covering amid plunging inventories.
–Zinc inventory in SHFE warehouses plunged to a 10-year low after buyers took advantage of price declines and while supply remains restricted by local production cuts.
–Zinc social inventory in Shanghai, Guangdong and Tianjin inched up nearly 700 mt from a week ago to 99,900 mt as downstream buyers hesitated to purchase.

Courtesy: Kedia Commodities

Source: Commodityonline.com

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