Technically Zinc market is under long liquidation as market has witnessed drop in open interest by 16.76% to settled at 1535 while prices down 1.45 rupees.
Now MCX Zinc is getting support at 258.1 and below same could see a test of 256.1 levels, and resistance is now likely to be seen at 262, a move above could see prices testing 263.9.
Zinc yesterday settled down by 0.55% at 260.05 as worries about demand in top consumer China, where a power crunch and rationing is shutting factories, triggered selling.
However downside seen limited as the market pinned its hopes on positive developments over the weekend that could lead to better Sino-U.S. relations. Belgium-based Nyrstar has cut zinc production at its smelter in the Netherlands because of the rise in electricity prices in Europe, the company said in a statement.
China will release another 150,000 tonnes of metals from its state reserves on Oct. 9 to downstream fabricators and manufacturers, the National Food and Strategic Reserves Administration said.
The administration will auction 30,000 tonnes of copper, 50,000 tonnes of zinc and 70,000 tonnes of aluminium via online platforms operated by Norinco and Minmetals Group, it said on its website.The supply side has experienced great disruptions, especially in Yunan and Hunan where the power rationing has been intensive.
Currently speaking, the impact of power rationing on the demand side has been limited, but the overall mid and downstream demand was still sluggish amid the high season.The operating rates of galvanising companies fell due to operating losses; while the production of die-casting zinc alloy plants was also subdued.
Trading Ideas:
–Zinc trading range for the day is 256.1-263.9.
–Zinc prices dropped as worries about demand in top consumer China, where a power crunch and rationing is shutting factories, triggered selling.
–However downside seen limited as the market pinned its hopes on positive developments over the weekend that could lead to better Sino-U.S. relations.
–Belgium-based Nyrstar has cut zinc production at its smelter in the Netherlands because of the rise in electricity prices in Europe.
Courtesy: Kedia Commodities
Source: Comodity Online
