Technically MCX Zinc is getting support at 193.9 and below same could see a test of 190.8 level, And resistance is now likely to be seen at 198.7, a move above could see prices testing 200.4.
Zinc on MCX settled up 2.15% at 197.05 supported as stocks keep falling. LME zinc stocks have fallen by 1.18 million tonnes from their 2012 peak.
The exchange’s stock reports have thrown up many surprises over the intervening years, with the downtrend sporadically interrupted by mass movements of off-market metal onto LME warrant, particularly in New Orleans. But the New Orleans zinc round-about appears to have ground to a halt. The last significant inflow at the port was in October and there have been no arrivals at all this year.
The only zinc to enter the LME warehouse system in 2019 has been a highly modest 2,150 tonnes at the Spanish port of Bilbao and a single-lot delivery of 25 tonnes at the Belgian port of Antwerp. Moreover, the headline LME stock figure includes 14,125 tonnes of metal earmarked for physical load-out, leaving just 44,200 tonnes of what are termed “open” stocks.
Also support seen as China's announcement to cut tax for manufacturers from next month to boost growth in the world's second-largest economy. China’s banking and insurance regulator issued rules requiring commercial banks to disclose their net stable funding ratios to help strengthen their liquidity risk management.
Commercial banks should disclose their net stable funding ratios for the most recent two quarters at least twice a year, the regulator said in a statement on its website. Operating rates across zinc concentrate mines in China are expected to rise 17.8 percentage points in February to 65.3% in March as mines in the north step up output in the warmer weather.
--Zinc trading range for the day is 190.8-200.4.
--Zinc prices gained supported by China's announcement to cut tax for manufacturers from next month to boost growth in the world's second-largest economy.
--The premium for cash zinc over the three-month LME contract stood at $55 a tonne, the highest since early January.
--New home prices in China grew at their slowest pace in 10 months in February as a cooling economy put a dent on overall demand.
Courtesy: Kedia Commodities