Technically Zinc market is under fresh buying as market has witnessed gain in open interest by 10.42% to settled at 1833 while prices up 1.5 rupees.
Now MCX Zinc is getting support at 276.5 and below same could see a test of 274.2 levels, and resistance is now likely to be seen at 280.9, a move above could see prices testing 283.
Zinc yesterday settled up by 0.54% at 278.75 as the total zinc inventory across seven major markets in China totalled 125,600 mt, down 5,100 mt from last Monday.
On the supply side, the environmental protection incident in Guangxi did not evolve, and the production in the south was not affected, hence the zinc supply was relatively sufficient.
The reserve ratio will be increased to 9% from 7%, the People’s Bank of China (PBOC) said on its website, to strengthen FX liquidity management at financial institutions.
China will start adding fiscal stimulus in early 2022 after the country’s top officials said their key goals for the coming year include counteracting growth pressures and stabilizing the economy.
China’s refined zinc output stood at 519,500 mt in November, up 20,200 mt or 4.05% on the month but down 7.61% on the year. The combined output from January to November stood at 5.57 million mt, up 0.41% year on year. Survey showed that China’s refined zinc output in November was basically on par with estimate.
The increase in output was partly contributed by the expected production resumption from power rationing in Hunan, Guangxi, Henan, Gansu and Liaoning. The additional output from Guangxi Yusheng Ge Co. and Southwest Energy & Mineral came on top of estimate.
Trading Ideas:
–Zinc trading range for the day is 274.2-283.
–Zinc prices rose as the total zinc inventory across seven major markets in China totalled 125,600 mt, down 5,100 mt from last Monday.
–The environmental protection incident in Guangxi did not evolve, and the production in the south was not affected, hence the zinc supply was relatively sufficient.
–China raises banks’ FX reserve requirements for 2nd time this year.
Courtesy: Kedia Commodities
Source: Comodity Online
