Zinc on MCX settled down -0.58% at 178.95 with a bunch of bearish fundamentals hitting the market, triggering a sell-off this week. Sentiments turned negative this week for Zinc prices after the update that China’s zinc production will grow in March, As some smelters will conduct maintenance in February which will affected the output nearly 21,000 tonnes will restart. Meanwhile the union representing striking workers at the Noranda Income Fund’s zinc processing facility in Quebec, vowed on Thursday to take the company to court over the alleged use of strikebreakers.
The market is watching the strike as zinc prices have more than doubled since the beginning of last year due to a shortage tied to mine closures and shutdowns. The dispute with the plant’s 370 workers, who walked off the job on Feb. 12, hinges on cuts being made in preparation for a change this year in an arrangement with Glencore Canada that is expected to boost expenses. Yesterday prices futher dropped as sentiments turned further weak after solid U.S. jobs data increased the likelihood of an interest rate hike this month.
US private sector job growth recorded its biggest increase in more than a year in February amid a surge in construction and factory hiring, suggesting the economy remains on solid ground despite an apparent further slowdown in the first quarter. Technically market is getting support at 177 and below same could see a test of 175.1 level, And resistance is now likely to be seen at 180.3, a move above could see prices testing 181.7
* Zinc trading range for the day is 175.1-181.7.
* Zinc prices dropped below 180 level as LME zinc succumbed to technical selling after it broke its 100dma, sliding to $2,651.
* Prices dropped as bunch of bearish fundamentals hitting the market, triggering a sell-off this week.
* Sentiments turned negative this week for Zinc prices after the update that China’s zinc production will grow in March,
Nickel on MCX settled down -0.13% at 678 tracking weakness from LME nickel prices which eased 0.8 percent on the possibility that the Philippines’ hardline environmental minister may not be confirmed by Congress, opening the door to a new minister who may be more permissive of the mining sector. But Regina Lopez said on Thursday that President Rodrigo Duterte would reappoint her if a decision is delayed, giving her more time to press her case on mine closures. Pressure also seen after the Domestic stainless steel prices in China have fallen over the past week on thin trading and a softening nickel market. Key economic data out already shows Chinese CPI at 0.8%, down from 2.5%, but the weaker figure has been blamed on the Chinese Lunar New Year holiday, while PPI climbed 7.8% after 6.9% in January.
Meanwhile the correction in the base metals continues, risk off seems to be underway ahead of next week’s FOMC meeting but large stock moves in copper and nickel and further uncertainty over Philippine and Indonesian mining and export policies are adding to the risk-off move, while recent lack of upside progress also seems to be prompting stale long liquidation. Key now will be how much buying steps off the sidelines to take advantage of the weaker prices, which coming just ahead of the seasonally stronger second quarter may be a welcome opportunity for consumers.
The correction in the metals also seems to be driven by the increasing chance of a US interest rate rise next week, which a few weeks ago was a 50:50 risk, but is now much higher. Technically market is getting support at 671.9 and below same could see a test of 665.8 level, And resistance is now likely to be seen at 683.7, a move above could see prices testing 689.4.
* Nickel trading range for the day is 665.8-689.4.
* Nickel prices continious to suffered a heavy selloff after PT Aneka Tambang, said it is taking steps to resume low-grade ore exports.
* Nickel settled 4.2% lower at $10,200/ton on the London Metal Exchange, and dropped 8.1% in two days, the most since August 2015.
* Prices are under pressure Philippines suggest that mine shutdowns recently ordered could be delayed or not occur at all.
Aluminium on MCX settled down -0.24% at 124.70 tracking weaknesss from LME Aluminium which closed 0.5 per cent down at $US1,868 fairly steady. Stock declines continue to be offset by re-warranting – Net inventories are down 16,750 tonnes to 2,084,800 tonnes and cancelled warrants fell 16,475 tonnes to 786,550 tonnes. The United States has launched a trade case accusing Chinese aluminium foil producers of dumping product and damaging its domestic industry, the first such case since the inauguration of U.S. President Donald Trump. The Aluminum Association filed antidumping and countervailing duty petitions with the Department of Commerce and the International Trade Commission charging that unfairly traded imports of certain aluminum foil from China are causing material injury to the domestic industry.
Bets on a Fed move on rates this month grew after data on Wednesday showed U.S. private sector job growth registered its biggest increase in more than a year in February, suggesting the economy remains on solid ground. Supporting the dollar, the number of Americans filing for unemployment benefits last week rebounded from a near 44-year low, but the labor market continues to tighten amid a sharp drop in job cuts in February.
China will move forward with restructuring central government enterprises this year, and focus on the steel, coal, heavy equipment and coal-fired power sectors, the head of the state asset regulator said. Technically market is under long liquidation as market has witnessed drop in open interest by -11.89% to settled at 2148 while prices down -0.3 rupees, now Aluminium is getting support at 123.7 and below same could see a test of 122.5 level, And resistance is now likely to be seen at 125.6, a move above could see prices testing 126.3.
*Aluminium trading range for the day is 122.5-126.3.
*Aluminium dropped reflecting losses across industrial metals and other assets as the markets geared up for an expected increase to U.S. interest rates this month.
*Global aluminium output was running at an annualised pace of 62.0 million tonnes in January, a new all-time record.
*Economic data out already shows Chinese CPI at 0.8%, down from 2.5%, but the weaker figure has been blamed on the Chinese Lunar New Year holiday.
Copper on MCX settled down -0.95% at 381.70 as supply fears eased and more stocks arrived into LME sheds. Copper in yesterday’s session dropped below 380 level at one point of time after solid U.S. jobs data increased the likelihood of an interest rate hike this month and on signs that a disruption at the world’s biggest copper mine may soon ease. While London Metal Exchange copper fell 1.1 percent to $5,701 a tonne after ending a tad lower in the previous session. The metal earlier touched $5,688, its lowest since Jan. 19.
Last month Supply fears had helped propel the copper price above $6,200 per tonne, but these fears have faded this week. Freeport Indonesia aims to resume copper concentrate production on March 21, according to Reuters. Meanwhile, there is talk that BHP Billiton is looking to use “contract workers” to resume production should the Escondida dispute continue beyond 30 days. Meanwhile, data released this week showed a significant drop in China’s copper imports.
In February, China imported 340,000 metric tons of copper, down 10.5% from January and 19% from last February. Also, from last Thursday through this Wednesday stocks of copper at LME approved warehouses nearly doubled to reach 288,525 tons. Most of the deliveries were to warehouses in Asia. On the demand side, a trade deficit in China for February has reinforced the growing view that economic activity in China picked up in the first two months of the year, adding to a global manufacturing revival.
Now technically market is under fresh selling and getting support at 378.6 and below same could see a test of 375.5 level, And resistance is now likely to be seen at 384.9, a move above could see prices testing 388.1.
*Copper trading range for the day is 375.5-388.1.
*Copper once again slid to settle at 381.70 after solid U.S. jobs data and on signs that a disruption at mine may soon ease.
*An end to the disruption at mine may be on the horizon, after BHP Billiton, said it may try to restart production at Escondida.
*Copper stocks in LME-registered warehouses rose a further 38,775 tonnes, increased 126,575 tonnes, or 64 per cent, this month.
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