MCX Zinc under short covering; Resistance seen at 216
Commodity Online | December 04 2020
UPDATED 10:20:49 IST

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Technically Zinc market is under short covering as market has witnessed drop in open interest by 1.26% to settled at 2589 while prices up 0.05 rupees.

Now MCX Zinc is getting support at 213.5 and below same could see a test of 212.3 levels, and resistance is now likely to be seen at 216, a move above could see prices testing 217.3.

Zinc yesterday settled up by 0.02% at 214.55 as sentiment got a boost after a group of US lawmakers unveiled a $908 billion stimulus plan, which includes more than $200 billion in Paycheck Protection Program small business loans.

Investor appetite for risk increased on the prospects of further fiscal stimulus from the United States as well as expectations of a solid global recovery.

In addition, manufacturing activities continued to expand in both China and the US according to data released yesterday, and this, together with positive progress in coronavirus vaccines, lifted market sentiment.

Demand from galvanising producers weakened amid a traditional low season and strict environmental inspections, but upbeat macroeconomic data and positive Covid-19 vaccine news may further boost SHFE zinc.

According to the customs data, zinc concentrate imports totalled 303,400 mt in October, up 39,000 mt from September and 53,000 mt from October 2019.

Zinc concentrate rose month-on-month in October as shipment from Peru remained normal and exports to China increased in September; demand for zinc ore rose sharply at smelters amid high output and winter stockpiling; domestic zinc ore output declined sharply in 2020 and mines in high-altitude areas will suspend operation.

Trading Ideas:
--Zinc trading range for the day is 212.3-217.3.
--Zinc gains as sentiment got a boost after a group of US lawmakers unveiled a $908 billion stimulus plan.
--Upbeat macroeconomic data and positive Covid-19 vaccine news further boost zinc.
--According to the customs data, zinc concentrate imports totalled 303,400 mt in October.

Courtesy: Kedia Commodities

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