Technically Zinc market is under short covering as market has witnessed drop in open interest by 7.31% to settled at 989 while prices up 2.8 rupees.
Now MCX Zinc is getting support at 253.6 and below same could see a test of 250.8 levels, and resistance is now likely to be seen at 258.8, a move above could see prices testing 261.2.
Zinc yesterday settled up by 1.1% at 256.35 as support seen after Fitch Solutions said demand was expected to be boosted by strong consumption from the steel sector in the coming months.
Fitch Solutions Country Risk and Industry Research (FSCRIR), in a note, said it had raised the price outlook for zinc this year to $2,900 a tonne from $2,600 since the demand-supply mismatch had been “long-standing”.
The price outlook is in comparison with the World Bank projecting zinc price at $2,700 a tonne for this year in its commodity forecast and International Monetary Fund pegging it at $2,828 by the year-end.
The International Metals Study Group, said world demand for refined zinc metal was forecast to rise by 4.3 per cent to 13.78 million tonnes (mt) this year, after falling by 3.9 per cent last year.
Supply of the metal was likely to rise by 5.7 per cent to 12 mt and refined zinc metal production would rise by 3.1 per cent to 14.13 mt. The Group said global supply of refined zinc metal would exceed demand by 353,000 tonnes this year.
Refined zinc output in China has begun to increase after being hampered by government-enforced power-rationing in Yunnan province, which accounts for 12.5 per cent of China’s annual refined zinc output, during May-June.
Trading Ideas:
–Zinc trading range for the day is 250.8-261.2.
–Zinc prices gained as support seen after Fitch Solutions said demand was expected to be boosted by strong consumption.
–Fitch Solutions said it had raised the price outlook for zinc this year to $2,900 a tonne from $2,600.
–The International Metals Study Group, said world demand for refined zinc metal was forecast to rise by 4.3 per cent to 13.78 million tonnes this year.
Courtesy: Kedia Commodities
Source: Comodity Online
