MCX Zinc under fresh buying; Resistance seen at 228.2
Commodity Online | April 08 2021
UPDATED 10:20:34 IST

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MCX Nickel likely to move in a range of 1253.1-1284.1

MCX Zinc under fresh buying; Resistance seen at 231.8

MCX Copper under fresh buying; Support seen at 692.1

Technically Zinc market is under fresh buying as market has witnessed gain in open interest by 11.32% to settled at 2301 while prices up 2.8 rupees.

Now MCX Zinc is getting support at 224.1 and below same could see a test of 221.5 levels, and resistance is now likely to be seen at 228.2, a move above could see prices testing 229.7.

Zinc yesterday settled up by 1.25% at 226.45 amid falling US dollar and US Treasury yields, and the International Monetary Fund raised its 2021 growth outlook for the global economy to 6%.

Treatment charges for domestic zinc concentrate continued to fall and rising production costs supported prices. In addition, zinc social inventories shrank further as downstream users restocked on demand.

Data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 14,500 mt in the week ended April 2 to 233,500 mt. The stocks fell 8,800 mt from Monday March 29.

Prices also remained supported in the wake of improving economic prospects backed by the Biden government’s more than $2 trillion stimulus plan. Stocks in Shanghai decreased due to increasing purchase volume of the downstream when zinc prices fell.

In south China's Guangdong, market arrivals decreased with stable downstream demand, which led to the continuous decrease in stocks. China’s economic recovery continued in March, powered by a strong surge in the service sector, data showed.

The global zinc market was oversupplied by 11,700 tonnes in January after a revised surplus of 23,500 tonnes in December, data from the International Lead and Zinc Study Group (ILZSG) showed. For 2020, the surplus in the roughly 13.5 million tonne a year market was 536,000 tonnes, according to the ILZSG.

Trading Ideas:
--Zinc trading range for the day is 221.5-229.7.
--Zinc prices increased amid falling US dollar and US Treasury yields, and IMF raised its 2021 growth outlook for the global economy to 6%.
--Treatment charges for domestic zinc concentrate continued to fall and rising production costs supported prices.
--Data showed that social inventories of refined zinc ingots decreased 14,500 mt in the week ended April 2 to 233,500 mt.

Courtesy: Kedia Commodities


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