MCX Zinc under long liquidation; Resistance seen at 145.2
Commodity Online | March 30 2020
UPDATED 09:50:22 IST

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Technically Zinc market is under long liquidation as market has witnessed drop in open interest by 3.42% to settled at 9773 while prices down 2.65 rupees.

Now MCX Zinc is getting support at 140.2 and below same could see a test of 138.2 levels, and resistance is now likely to be seen at 145.2, a move above could see prices testing 148.2.

Zinc yesterday settled down by 1.83% at 141.95 on profit booking after prices gained supported by low stocks and better demand in China. Market sentiment was also supported by hopes of further stimulus by major countries to cushion the economic fallout from the pandemic.

Sumitomo Corp will temporarily suspend its San Cristobal silver-zinc-lead mine, while Recylex closed its Weser-Metall lead plant and Trevali halted works atits Caribou zinc-lead-silver mine for now. Zinc inventories in China fell sharply this week, as downstream consumers stepped up procurement following an improvement in orders.

Data showed that social inventories of refined zinc ingots across Shanghai, Tianjin, Guangdong, Jiangsu, Zhejiang, Shandong and Hebei decreased 20,700 mt in the week ended March 27 to 307,000 mt, marking a second straight week of decline.

The stocks fell 7,200 mt in the prior week, the first weekly decline since the Lunar New Year holiday. As demand picked up, Shanghai, Guangdong and Tianjin all saw significant declines in their zinc inventories this week. The Labor Department reported that jobless benefit claims had soared to 3.28 million last week, by far a record.

That number blew past the Great Recession peak of 665,000 and the all-time mark of 695,000 in October 1982. The unprecedented spike in jobless claims grew hopes for further stimulus, which might have also contributed to gains in stock markets.

Trading Ideas:
--Zinc trading range for the day is 138.2-148.2.
--Zinc prices dropped on profit booking after prices gained supported by low stocks and better demand in China.
--Zinc inventories in China fell sharply this week, as downstream consumers stepped up procurement following an improvement in orders.
--Sumitomo Corp will temporarily suspend its San Cristobal silver-zinc-lead mine.

Courtesy: Kedia Commodities