Technically Zinc market is under short covering as market has witnessed drop in open interest by 17.59% to settled at 815 while prices up 1.8 rupees.
Now MCX Zinc is getting support at 256.1 and below same could see a test of 253.9 levels, and resistance is now likely to be seen at 260, a move above could see prices testing 261.7.
Zinc yesterday settled up by 0.7% at 258.15 as some smelters in Yunnan were asked to reduce the production by 20-30%.The supply side has been experiencing disruptions including intensifying power rationing.
The prices of coal kept rising on tight supply, pushing up zinc. Canadian miner Teck Resources Ltd cut its forecast for annual refined zinc production, citing an impact on its operations from wildfires in British Columbia.
The company projected refined zinc production for 2021 to be in the range of 285,000 tonnes to 290,000 tonnes, down from a previous estimate of 290,000 tonnes to 300,000 tonnes. Production in Guangxi and Jiangsu has cut output due to power rationing.
The refined zinc output is expected to increase 11,800 mt on the month to 520,700 mt in September, but the output is likely to lower 2,000 mt compared with the original estimate. Zinc ingot inventory has been declining since mid-March.
The weekly inventory across the seven markets totalled 117,200 mt as of September 17, down 55.84% from March 15. The operating rates at downstream plants trended lower amid power rationing and the dual control of energy consumption, coupled with weak exports.
–Zinc trading range for the day is 253.9-261.7.
–Zinc prices gained as some smelters in Yunnan were asked to reduce the production by 20-30%.
–The supply side has been experiencing disruptions including intensifying power rationing.
–Canada’s Teck cuts refined zinc output forecast on wildfire impact.
Courtesy: Kedia Commodities
Source: Comodity Online