Technically MCX Zinc is getting support at 209.5 and below same could see a test of 208.3 levels and resistance is now likely to be seen at 212.8, a move above could see prices testing 214.9.
Zinc on MCX settled down 1.82% at 210.75 as investors continue to wonder if an economic slowdown in China could limit demand. Brazilian miner Nexa Resources SA said that it has reached a deal to end a workers' strike at its Cajamarquilla zinc smelter in Peru.
China’s banking regulator plans to cut the amount of funds that banks are required to set aside to cover loan losses in a bid to provide more liquidity to the market. Commercial banks are required to reduce the provision coverage ratio to 120-150% and loan provision ratio to 1.5-2.5% according to individual bank’s situation.
The ratios stand at 150% and 2.5% currently. Concerns remained about U.S. President Donald Trump’s decision to impose a 25 percent import tariff on steel and 10 percent on aluminium, with initial exemptions for Canada and Mexico. China said it “resolutely opposed” the tariffs and that they would “seriously impact the normal order of international trade”, while the EU said it would go to the World Trade Organization to impose its own measures if hit by the tariffs.
The spread of cash zinc to the three-month contract moved to a $3.50 discount for cash from a premium of nearly $50 in late February, showing healthier near-term supply. Chinese data showed consumer prices rose 2.9% y/y in February, up from 1.5% in January, and beating expectations of 2.5%, while producer prices rose 3.7% y/y, down from 4.3%, and beating forecasts of 3.8%. US data showed the unemployment rate steadied at 4.1% in February for the fifth straight month, which is the lowest since December 2000, while above forecasts of 4%.
--Zinc trading range for the day is 208.3-214.9.
--Zinc dropped as investors continue to wonder if an economic slowdown in China could limit demand.
--Brazilian miner Nexa Resources SA said that it has reached a deal to end a workers' strike at its Cajamarquilla zinc smelter in Peru.
--South Korea is seeking to buy 1,000 tonnes of zinc for arrival in May via separate tenders.
Courtesy: Kedia Commodities