Technically Zinc market is under long liquidation as market has witnessed drop in open interest by 30.54% to settled at 1333 while prices down 14.1 rupees.
Now MCX Zinc is getting support at 301.4 and below same could see a test of 294.5 levels, and resistance is now likely to be seen at 321, a move above could see prices testing 333.7.
Zinc yesterday settled down by 4.37% at 308.4 on profit booking amid concern that slowing growth in top consumer China will impact demand.
China’s economy grew by 4.9% in the third quarter, its slowest pace in a year, hurt by power shortages, supply chain bottlenecks and troubles in the property market.In recent sessions, prices rallied as investors fretted over supply shortage amid production cuts due to electricity price hikes in Europe.
Belgium-based Nyrstar said last week it would cut production by up to 50% at its three European zinc smelters and Glencore , which also has three zinc smelters in Europe, said it was “adjusting production” to save energy costs.
Still, sky-high power prices are also lowering demand at metals-manufacturing companies and the Chinese state reserve bureau released 180,000 tonnes of zinc so far this year to contain prices.
The global zinc surplus is likely to shrink to 44kt in 2022 from 217kt this year, according to the International Lead and Zinc Study Group. Global zinc consumption growth is estimated at 6.2% in 2021 before easing to 2.3% next year.
The overseas production reduction amid rising electricity and carbon emission costs has been intensifying. Though Glencore announced that it will only apply staggered production, the market still heated up as it takes up a large amount of the total production.
Trading Ideas:
–Zinc trading range for the day is 294.5-333.7.
–Zinc dropped on profit booking amid concern that slowing growth in top consumer China will impact demand.
–In recent sessions, prices rallied as investors fretted over supply shortage amid production cuts due to electricity price hikes in Europe.
–Belgium-based Nyrstar said it would cut production by up to 50% at its three European zinc smelters and Glencore.
Courtesy: Kedia Commodities
Source: Comodity Online