MCX Zinc market under short covering; Resistance seen at 151.5
Commodity Online | October 17 2016
UPDATED 10:40:23 IST

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Zinc on MCX settled up 0.43% at 150.5 on short covering tracking firmness in LME prices settling up by 0.8% at $2258, but prices dropped on weekly basis as pressure seen Peruvian copper-zinc miner Antamina aims to double zinc production next year. The mine is expected to produce 340,000-350,000 mt of zinc in 2017, up from an estimated 170,000-180,000 mt this year. Nystar’s refined zinc output may fall by 30,000 tonnes in the third quarter of this year due to industrial accident. Its zinc concentrate output is also expected to decline 4,000 tonnes in Q3 because of the same reason, and mainly at two mines in Canada.

Nystar’s refined zinc production may fall below its 1-1.1 million tonnes target set early this year. Combined zinc inventories in Shanghai, Tianjin and Guangdong added 14,900 from September 30 to 263,900 tonnes October 14. Arriving shipments were steady during China’s National Day holiday, while deliveries taken by downstream buyers were limited, allowing inventories to grow. Combined zinc inventories in the three regions fell slightly as of October 14 compared to October 8, due mainly to sharp drop in Guangdong’s zinc inventories. China hopes to boost private investment by improving financial services for small enterprises, its powerful state planner said.

The German economy will lose some steam in the second half of the year after its robust performance in the first half, the Economy Ministry said, putting a damper on growth hopes after better-than-expected economic data. Technically market is under short covering as market has witnessed drop in open interest by -9.01% to settled at 6362 while prices up 0.65 rupee, now Zinc is getting support at 149.4 and below same could see a test of 148.2 level, and resistance is now likely to be seen at 151.5, a move above could see prices testing 152.4.

Trading Ideas:
--Zinc trading range for the day is 148.2-152.4.
--Zinc prices ended with gains on short covering tracking firmness in LME prices settling up by 0.8% at $2258
--Peruvian copper-zinc miner Antamina aims to double zinc production next year, the mine is expected to produce 340,000-350,000 mt of zinc in 2017
--Combined zinc inventories in Shanghai, Tianjin and Guangdong added 14,900 from September 30 to 263,900 tonnes October 14.

Courtesy: Kedia Commodities

Commodity Arrivals Rate
Mustard Oil 1 10300.00
Coconut Oil 0.1 18100.00
Arecanut 4 36588.00
Sugar 30 3550.00

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