MCX Zinc expected to trade in a range between 178.7-189.5
Commodity Online | November 09 2018
UPDATED 13:22:51 IST

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Technically Zinc market is getting support at 182.1 and below same could see a test of 178.7 levels and resistance is now likely to be seen at 187.5, a move above could see prices testing 189.5.

Zinc on MCX settled up 1.73% at 185.35 tracking firmness from LME zinc’s three-month price appreciated 2.6% over in yesterday’s session, with decade-low LME inventory an equal factor behind the rising prices.

Headline inventories in the LME warehouse system continue to fall. At 134,750 tonnes they are close to a 10-year low of 131,775 tonnes reached in March. The premium for cash zinc over the three-month contract at $47.50 has eased from highs around $60 in late October, but signals that shortages of nearby supply remain.

The roughly 13.5 million tonne global zinc market had a deficit of 292,000 tonnes in the first eight months of the year, the ILZSG said. Last night the US dollar held on to earlier gains as the Federal Reserve kept its monetary policy on hold and indicated further gradual rate hikes.

The dollar index inched up and closed at 96.67, surpassing levels earlier in the day prior to the Fed announcement. The Fed has raised rates three times this year and is expected to hike rates again before the end of 2018. 

Base metals closed mixed with SHFE contracts rising for the most part. SHFE lead surged 1.59%, tin jumped 0.92%, nickel rose 0.79%, zinc increased 0.37%, copper grew 0.04%, while aluminum lost 0.14%.

LME lead also soared 3.81%, zinc gained 1.46%, while aluminium slid 0.23%, copper fell 0.18%, and nickel edged down. China Customs published China's trade balance for October, reporting a bigger-than-expected trade surplus as imports shrank significantly.               

Trading Ideas:
--Zinc trading range for the day is 178.7-189.5.
--Zinc gained as the market refocused from the US midterm election results to the declines in LME inventories.
--Inventories in Shanghai, Guangdong and Tianjin came in at 135,900 mt as of Nov 5, down 14,800 mt from a week ago.
--China is ready to hold discussions and work with the United States to resolve trade disputes because the world's two largest economies stand to lose from confrontation.

Courtesy: Kedia Commodities

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