Technically Zinc market is under short covering as market has witnessed drop in open interest by -13.93% to settled at 1551 while prices up 1.3 rupees.
Now MCX Zinc is getting support at 272.9 and below same could see a test of 268.5 levels, and resistance is now likely to be seen at 279.8, a move above could see prices testing 282.3.
Zinc yesterday settled up by 0.47% at 277.3 due to low inventories in Europe after prices dropped earlier as LME inventory has been rising for three days with a combined accumulation of 58,800 mt, mainly contributed by the warehouses in Singapore.
The LME inventory in Asia continued to rise, but the low inventory in eurozone and the US sustained, and the spot supply was also tight. In the spot market, the consumption in Shanghai, Guangdong and Tianjin was sluggish.
Meanwhile, the demand from the downstream galvanising and die-casting alloy sectors also weakened. China’s factory output grew faster than expected in November, supported by stronger energy production and a moderation in sky-high materials costs, but new curbs to fight rising COVID-19 cases hit retailers in the world’s second-largest economy.
The data, along with a slowdown in investment growth, underlines the persistent headwinds facing the economy, which have already prompted policymakers this month to ratchet up support.
Factory production rose 3.8% in November from a year earlier, official data showed, beating expectations for a 3.6% rise and accelerating from a 3.5% increase in October.
China’s central bank partially rolled over maturing medium term loans on Wednesday as it sought to boost liquidity, while market participants expected the central bank to implement more easing measures to help arrest the economic slowdown.
–Zinc trading range for the day is 268.5-282.3.
–Zinc gained due to low inventories in Europe after prices dropped earlier as LME inventory has been rising for three days.
–The LME inventory in Asia continued to rise, but the low inventory in eurozone and the US sustained.
–Meanwhile, the demand from the downstream galvanising and die-casting alloy sectors also weakened.
Courtesy: Kedia Commodities
Source: Comodity Online