Technically Zinc market is under fresh selling as market has witnessed gain in open interest by 7.18% to settled at 1329 while prices down 0.3 rupees.
Now MCX Zinc is getting support at 275.1 and below same could see a test of 272.9 levels, and resistance is now likely to be seen at 280.5, a move above could see prices testing 283.7.
Zinc yesterday settled down by 0.11% at 277.25 amid concerns that economic growth is slowing in China. However support seen earlier in the day as the zinc concentrate supply in Inner Mongolia tightened further due to power rationing.
And the time and money required to transport zinc concentrate from one province to another increased significantly on the combined influences of COVID and transportation disruptions. Hence, TCs trended lower again.
While the production of smelters are unlikely to return to the peak level either amid shrinking profits. Zinc smelters in China made 441,000 tonnes of the metal in October, down 14,000 tonnes from September but up 9.2% year-on-year.
Zinc output was also hit by electricity curbs and energy consumption controls in regions such as Inner Mongolia, Hunan, Guangxi, Henan and Shaanxi. China’s Jan-Oct zinc production at the surveyed companies rose 3.2% from same period a year earlier to 4.47 million tonnes.
The research house said zinc inventory at major smelters has increased slightly so far this month compared with early October, and most companies that have maintained normal production are accumulating stockpiles.
China’s factory gate prices rose at the fastest pace in 26 years in October, beating forecasts and further squeezing profit margins for producers already grappling with soaring coal prices and other commodity costs due to a power crunch.
Trading Ideas:
–Zinc trading range for the day is 272.9-283.7.
–Zinc prices dropped amid concerns that economic growth is slowing in China.
–Zinc smelters in China made 441,000 tonnes of the metal in October, down 14,000 tonnes from September but up 9.2% year-on-year.
–While the production of smelters are unlikely to return to the peak level either amid shrinking profits.
Courtesy: Kedia Commodities
Source: Comodity Online
