Technically Zinc market is under fresh buying as market has witnessed gain in open interest by 13.64% to settled at 9398 while prices up 5.1 rupees.
Now MCX Zinc is getting support at 221.1 and below same could see a test of 218.5 level, And resistance is now likely to be seen at 225.3, a move above could see prices testing 226.9.
Zinc on MCX settled up 2.33% at 223.70 on fresh buying tracking LME Zinc which climbed 1.9 percent on indications of a tight market.
Zinc prices surged to the highest since 2007 on January 29th 2018 as falling stockpiles suggested tight supplies, drives zinc prices to new highs. Shortages of refined metal have seen stocks in LME approved warehouses fall to their lowest since 2008 at 176,275 tonnes.
Support also seen as worries that the Chinese market remains in surplus despite capacity cuts. Preliminary data recently compiled by the ILZSG, the global market for refined zinc metal was in deficit by 401 kilo tonne over the first ten months of 2017 with total reported inventories declining by 282 kilo tonne over the same period.
World zinc mine production rose by 3.8% mainly as a result of increases in Eritrea, India, Peru and Turkey that more than balanced falls in Australia and the United States. Now Markets await US inflation data later this week, specifically consumer and producer prices in addition to retail sales, industrial, housing, and consumer confidence data.
As chances of a Fed rate hike next month increase, metal prices were pushed to month lows last week, as the dollar index also rose to two-week highs on surging US treasury bond yields, however the metal was propped up by heavy losses sustained by the stock market.
--Zinc trading range for the day is 218.5-226.9.
--Zinc prices gained boosted by worries about tighter supplies
--Smelters expected to reduce zinc processing fees amid mine supply shortage
--Zinc mine supply is forecast to grow by 664,000 tonnes this year, following an estimated increase of 785,000 tonnes in 2017.
Courtesy: Kedia Commodities