MCX Zinc under fresh buying; Support seen at 156.6
Commodity Online | May 21 2020
UPDATED 10:20:30 IST

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Technically Zinc market is under fresh buying as market has witnessed gain in open interest by 0.17% to settled at 8917 while prices up 1.05 rupees.

Now MCX Zinc is getting support at 156.6 and below same could see a test of 154.5 levels, and resistance is now likely to be seen at 159.8, a move above could see prices testing 160.9.

Zinc yesterday settled up by 0.67% at 158.5 as investors clung to hopes of a recovery from a coronavirus-fueled slump amid signs of more stimulus for ailing sectors.

German zinc producer Metallwerk Dinslaken (MWD) said it will close permanently because of the economic fallout of the coronavirus crisis.

The company produces about 25,000 tonnes annually of secondary zinc and zinc alloys from scrap at its plant in Dinslaken and some 41 jobs will be lost.The coronavirus shutdowns have greatly reduced availability of zinc scrap while zinc customers, especially in Italy, have cut zinc purchases, said a spokesman.

Glencore has reduced its 2020 zinc production guidance by 105,000 tonnes to 1.16 million tonnes, partly reflecting temporary COVID-19 closures at the Matagami mine in Canada and the Antamina mine in Peru, but also the deferral of a new mine in Kazakhstan.

Zinc inventories in China rose slightly over the weekend, primarily propelled by gains in the north amid concentrated arrivals and muted purchases by downstream consumers.

Data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei increased 400 mt from last Friday May 15 to 227,700 mt as of Monday May 18.

The stocks were down 9,900 from last Monday May 11. Stocks in Tianjin and Hebei rose over the weekend, as deliveries from east China arrived in Tianjin and downstream consumers in north China held back on sales at the end of last week.

Trading Ideas:
--Zinc trading range for the day is 154.5-160.9.
--Zinc gained as investors clung to hopes of a recovery from a coronavirus-fueled slump amid signs of more stimulus for ailing sectors.
--German zinc producer Metallwerk Dinslaken (MWD) said it will close permanently because of the economic fallout of the coronavirus crisis.
--Zinc inventories in China rose slightly over the weekend, primarily propelled by gains in the north amid concentrated arrivals and muted purchases.

Courtesy: Kedia Commodities

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