MCX Zinc under short covering; Resistance seen at 196
Commodity Online | October 16 2020
UPDATED 10:20:12 IST

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Technically Zinc market is under short covering as market has witnessed drop in open interest by 28.54% to settled at 1650 while prices up 2.55 rupees.

Now MCX Zinc is getting support at 191.1 and below same could see a test of 187.9 levels, and resistance is now likely to be seen at 196, a move above could see prices testing 197.7.

Zinc yesterday settled up by 1.33% at 194.15 as support seen amid uncertainties over zinc concentrate supply in Q4. China’s new yuan loans and social financing data topped expectations as its economy has been recovering from the COVID-19 pandemic.

The producer price index (PPI) for September inched up 0.1% on the month, but fell 2.1% on the year. Central bank officials expected the third-quarter GDP to expand further. China's refined zinc production rose 4.2% year-on-year in September to 471,000 tonnes, also up 16,000 tonnes month-on-month.

Smelting profits were relatively stable and the supply of raw materials was still guaranteed, which sees output rising to more than 475,000 tonnes in October. Stalled talks on US fiscal stimulus and muted trades in the spot market after the National Day holidays cooled market sentiment.

Mitsui Mining and Smelting Co Ltd , said it planned to produce 118,600 tonnes of refined zinc in the second half of the 2020/21 financial year, up 10.0% from a year earlier.China's refined zinc output in September basically met expectations as some smelters in Henan, Inner Mongolia, Guangdong and other regions resumed production after the maintenance. In addition, some refineries in Shaanxi and Sichuan continued to increase production.

Trading Ideas:
--Zinc trading range for the day is 187.9-197.7.
--Zinc prices gains as support seen amid uncertainties over zinc concentrate supply in Q4.
--China's refined zinc production rose 4.2% year-on-year in September to 471,000 tonnes.
--Mitsui Mining and Smelting Co Ltd, said it planned to produce 118,600 tonnes of refined zinc in the second half of the 2020/21.

Courtesy: Kedia Commodities



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