Technically Zinc market is under fresh buying as market has witnessed gain in open interest by 47.89% to settled at 2279 while prices up 13.7 rupees.
Now MCX Zinc is getting support at 273.4 and below same could see a test of 264.3 levels, and resistance is now likely to be seen at 287.5, a move above could see prices testing 292.5.
Zinc yesterday settled up by 5.1% at 282.35 as Nyrstar will cut production by up to 50% at its three European zinc smelters from Wednesday due to the soaring price of electricity, the Belgium-based company said.
“The cost burden of carbon emitted by the electricity sector which is passed on to industrial and domestic customers, mean it is no longer economically feasible to operate the plants at full capacity,” Nyrstar said.
“Indirect cost compensation for energy-intensive producers to protect their competitiveness versus non-EU producers varies by European country and this puts Nyrstar’s Budel, Balen and Auby plants at a competitive disadvantage, compounding the impact of extreme energy prices.”
Nyrstar did not say how much zinc production would be lost or provide the production capacity of the three smelters. Electricity prices have surged to record highs in recent weeks, driven by power shortages in Asia and Europe, with China’s crisis expected to last through the end of the year and crimp growth in the world’s second-largest economy.
The global zinc market will be slightly over-supplied this year and next, the International Lead and Zinc Study Group said. U.S. consumer prices increased solidly in September and are poised to rise further in the months ahead amid a surge in the costs of energy products.
–Zinc trading range for the day is 264.3-292.5.
–Zinc prices rose as Nyrstar to cut output by up to half at Europe zinc smelters.
–Zinc prices touched a near 14-year high in Shanghai while in London they jumped to the strongest in over 3-1/2 years.
–The global zinc market will be slightly over-supplied this year and next, the International Lead and Zinc Study Group said.
Courtesy: Kedia Commodities
Source: Comodity Online