Technically Zinc market is under long liquidation as market has witnessed drop in open interest by 2.52% to settled at 4488 while prices down 0.5 rupees.
Now MCX Zinc is getting support at 191.2 and below same could see a test of 190.1 levels, and resistance is now likely to be seen at 193.9, a move above could see prices testing 195.5.
Zinc on MCX settled down 0.26% at 192.35 as the market has digested Powell’s rate cut hint and re-focused on fundamentals. Expectations of higher inventories and sluggish consumption drove traders to continue to move their positions.
Zinc three-month spread on the London Metal Exchange (LME) also returned to premium after three sessions in discount. LME zinc stocks have been falling since May. Zinc alloy die-casting plants in China further scaled back their operations in July, showed an SMM survey, as demand weakened amid a traditional low season.
Data released on July 11 showed that operating rates across Chinese manufacturers of zinc alloy die-castings averaged 46.32% in June, down 0.82 percentage point from May and 2.32 percentage points from June 2018. This was the second straight month of decline, after an on-month drop of 7.4 percentage points in May. China's consumer prices continued stable growth while inflation at the factory gates weakened.
The consumer price index (CPI), a main gauge of inflation, rose 2.7% year on year in June, the same expansion as that of May, the National Bureau of Statistics (NBS) said. US wholesale inventories rose in May amid a strong increase in the automotive sector, but the accumulation pace is slowing, supporting views that inventory accumulation could be a drag on economic growth in the second quarter.
--Zinc trading range for the day is 190.1-195.5.
--Zinc prices traded in range as the market has digested Powell’s rate cut hint and re-focused on fundamentals.
--Expectations of higher inventories and sluggish consumption drove traders to continue to move their positions.
--Zinc three-month spread on the LME also returned to premium after three sessions in discount.
Courtesy: Kedia Commodities