Technically Zinc market is under long liquidation as market has witnessed drop in open interest by 4.63% to settled at 1196 while prices down 2.1 rupees.
Now MCX Zinc is getting support at 281 and below same could see a test of 278.4 levels, and resistance is now likely to be seen at 285.9, a move above could see prices testing 288.2.
Zinc yesterday settled down by 0.74% at 283.45 as euro zone manufacturing activity was curtailed by supply chain bottlenecks and logistical problems which sent input costs soaring.
Ongoing disruptions caused by the coronavirus pandemic, alongside a shortage of heavy goods vehicle drivers, has caused product shortages and left factories struggling to get the raw materials they need.
The decline in coal prices has hedged the previous concerns about the supply side of domestic non-ferrous metals from the power curtailment, and the stimulus has gradually weakened.
The recent electricity curtailment in Inner Mongolia has led to mine production, and the reduction in production in some mines is expected to heat up the supply of zinc concentrates. On the macro front, the Reserve Bank of Australia cancelled the yield target, indicating an open mind to early interest rate hike.
In China, the experts from Ministry of Commerce research institute said that the routine notice of guaranteeing supply and stabilising prices of the consumer market is amid at ensuring sufficient supply of daily necessities. While the broad market remained tense, and the domestic economy still possess the possibilities of going down.
Trading Ideas:
–Zinc trading range for the day is 278.4-288.2.
–Zinc prices remained under pressure as euro zone manufacturing activity was curtailed by supply chain bottlenecks and logistical problems.
–The decline in coal prices has hedged the previous concerns about the supply side of domestic non-ferrous metals from the power curtailment.
–The social inventories of zinc ingots totalled 140,700 mt as of November 1, down 2,900 mt from Friday October 29.
Courtesy: Kedia Commodities
Source: Comodity Online
