Zinc on MCX settled down -1.46% at 165.15 as inflows of imported zinc added to supplies despite fewer shipments from zinc smelters. Many lead-zinc mines and smelters in Huayuan County, Hunan Province restarted production recently after environmental protection inspections. With approval by the Party Central Committee and the State Council, seven central environmental protection teams of the third round of environmental protection inspections in China entered Tianjin, Shanxi, Liaoning, Anhui, Fujian, Hunan and Guizhou during April 24-28, 2017. Spot trading in Shanghai market was slack due to month-end liquidity crunch and soft demand.
Zinc inventories in Shanghai increased 8,000-9,000 tonnes compared to levels before the Chinese Dragon Boat Festival during May 28-30. Also weighing on metals was the firmer dollar index which extended gains after the ADP data, already supported by higher U.S. Treasury yields and solidifying expectations of a rise in U.S. interest rates this month.
Traders believe there is a 96 percent chance of a rate rise at the June policy meeting and a 50 percent chance of one more hike before the end of 2017. Now market participants were especially eyeing Friday’s nonfarm payrolls report for further indications on the strength of the U.S. job market, which could give additional clues on whether or not the Federal Reserve will hike rates at its June policy meeting.
Technically market is under long liquidation as market has witnessed drop in open interest by -2.34% to settled at 4260 while prices down -2.45 rupees, now Zinc is getting support at 164.3 and below same could see a test of 163.3 level, And resistance is now likely to be seen at 166.8, a move above could see prices testing 168.3.
*Zinc trading range for the day is 162.0 – 167.10. Possible to go Down and Touch 162
*Zinc prices dropped as inflows of imported zinc added to supplies despite fewer shipments from zinc smelters.
*Spot trading in Shanghai market was slack due to month-end liquidity crunch and soft demand.
*Zinc inventories in Shanghai increased 8,000-9,000 tonnes compared to levels before the Chinese Dragon Boat Festival during May 28-30.