Zinc on MCX settled up 1.47% at 213.85 gained on fresh buying tracking firmness from LME Zinc which was the only metal to witness any gains despite with negative sentiment stemming from a weaker downstream stainless steel market weighing on prices.
Meanwhile in China, stainless steel prices have struggled – some market participants have lowered their prices further to draw down their inventories. Weak demand and soft prices may weigh on if Chinese apparent demand continues to soften in the months ahead.
Over the last two weeks, some 300 series-producing stainless steel mills have claimed that they will cut production in March. While Chinese zinc smelters are increasingly turning towards North Korea as a source of concentrates supply rather than traditional overseas partners while treatment charges (TCs) in the international market remain soft, market observers claimed.
While Chinese imports of zinc ores and concentrates have fallen 32 percent in January-July from last year, according to official statistics, North Korean imports have jumped 184 percent, making it China’s third-largest supplier – it has leapfrogged Mongolia, Morocco and Bolivia.
North Korea’s emergence as a partner for Chinese zinc smelters and strong growth in Chinese mined production this year could negate mine output cuts from Glencore, Nyrstar and MMG, which have been the main drivers of zinc’s 45-percent price gain this year.
--Zinc trading range for the day is 210.6-215.8.
--Zinc prices gained after LME zinc rose 1.4 percent to $3,286 due to low level buying amid firmness in other base metals counters.
--Brazilian miner Nexa Resources SA said that it has reached a deal to end a workers' strike at its Cajamarquilla zinc smelter in Peru.
--The spread of cash zinc to the three-month contract moved to a $3.50 discount for cash from a premium of nearly $50 in late February
Courtesy: Kedia Commodities