Technically Zinc market is under fresh buying as market has witnessed gain in open interest by 2.58% to settled at 6674 while prices up 0.5 rupees.
Now MCX Zinc is getting support at 189.8 and below same could see a test of 187.4 level, And resistance is now likely to be seen at 194.4, a move above could see prices testing 196.6.
Zinc on MCX settled up 0.26% at 192 recovered from the day's low of 189.65 as support seen from fresh buying near 190 level as Zinc remains one of the favourite commodity for market player because its fundamental outlook remains bright despite the recent run of stock increases in LME-listed warehouses and potential mine restarts.
Also supportive is the expectation of stronger demand in top consumer China, where banks extended 2.03 trillion yuan in net new yuan loans in January, the second-highest monthly tally on record. While in the morning session prices for Zinc dropped below 190 level as dollar strength which throw up more headwinds for metals.
U.S. retail sales rose more than expected in January and consumer prices recorded their biggest gain in nearly four years, boosting prospects of an interest rate increase from the Federal Reserve next month. The LME three-month zinc price rallied this week, hitting a peak of $2,980 per tonne on Monday – just $5 below fresh multi-year highs – before retreating to $2,845, down $25 on the previous close.
Also availability has increased over two consecutive days – 10,425 tonnes were put back on-warrant on Thursday in LME-listed warehouses in New Orleans, which follows yesterday’s net stock increase of 14,450 tonnes in the same location Although stocks fell 1,800 tonnes to 393,925 tonnes today, on-warrant material at 299,225 tonnes is at its highest in a month - a reversal of the downward trend that had been in place since the second half of 2016.
--Zinc trading range for the day is 187.4-196.6.
--Zinc recovered from day's low on fresh buying as fundamental outlook remains bright despite the recent run of stock increases.
--Two of the largest zinc mines in the world have closed in the last few years due to ore depletion, removing ~4 % of world supply.
--Zinc demand has steadily increased throughout the last several years and and is expected to increase by 2.1% to 13.85 million tonnes in 2017.
Courtesy: Kedia Commodities