MCX Zinc under fresh selling; Support seen at 161.6
Commodity Online | July 03 2020
UPDATED 10:20:26 IST

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MCX Aluminium may trade between 139.8-142.6 levels

MCX Nickel likely to move in a range of 1028.6-1057

MCX Zinc under fresh buying; Support seen at 182.6

MCX Copper under long liquidation; Resistance seen at 507.1

Technically Zinc market is under fresh selling as market has witnessed gain in open interest by 1.16% to settled at 1664 while prices down 1.65 rupees.

Now MCX Zinc is getting support at 161.6 and below same could see a test of 160.5 levels, and resistance is now likely to be seen at 164.5, a move above could see prices testing 166.3.

Zinc yesterday settled down by 1% at 162.6 amid easing ore supply—as evidenced by higher TCs—and increased supply from smelters as well as the absence of a strong driver of consumption.

China's central bank announced that it would cut the re-discount and re-lending rates by 25 basis points as of July 1, in a move that will reduce funding costs for smaller firms and rural sectors.

In Europe, Germany’s manufacturing contraction eased in June, with the final IHS Markit PMI coming in at 45.2, exceeding a flash estimate of 44.6 and up from 36.6 in May.

The zinc market was in surplus by 51 kt during January to April 2020 which compares with a deficit of 75 kt recorded in the whole of the previous year.Reported stocks increased by 151 kt during January to April which included a net increase in Shanghai of 105 kt over the period.

LME stocks rose over the January to April period to close 50 kt above the December 2019 level. LME stocks represent 16 per cent of the global total with the bulk of the metal held in Asian and Dutch warehouses.

Global refined production rose by 2.5 per cent and demand was 0.7 per cent higher than the levels recorded one year earlier. Japanese apparent demand was, at 167 kt, 6 per cent below the equivalent total for January to April 2019.

Trading Ideas:
--Zinc trading range for the day is 160.5-166.3.
--Zinc dropped amid easing ore supply—as evidenced by higher TCs—and increased supply from smelters as well as the absence of a strong driver of consumption.
--China's central bank announced that it would cut the re-discount and re-lending rates by 25 basis points as of July 1.
--The zinc market was in surplus by 51 kt during January to April 2020 which compares with a deficit of 75 kt recorded in the whole of the previous year.

Courtesy: Kedia Commodities