Zinc on MCX settled down -0.73% at 156.3 on profit booking after prices gained fuelled by surging prices for Chinese steel and increased risk appetite after a pick-up in manufacturing. LME zinc stocks and cancelled warrants were both 1,025 tonnes lower at 451,950 tonnes and 62,450 tonnes respectively. SHFE sheds stocks have been steadily declining, they stood at 165,295 tonnes, down from 207,163 tonnes at the start of the year. Premiums for zinc in Shanghai bonded zones rose by $5 to $115-$125 last week, the first rise since May, the first signs of an expected tightening supply. China’s imports of refined zinc slumped by 60 percent in September.
Traders said they were holding onto stock in hopes of higher premiums, ahead of fourth quarter restocking by galvanisers and given dwindling mine supply. Standard Chartered more than doubled its 2016 forecast zinc deficit to 464,000 tonnes, driven by a shortfall of mine supply within China. Business confidence in Germany rose to the highest in more than two years, while New York City construction spending is expected to climb to a record this year, according to reports. Those came a day after data showing expansion at U.S. and German factories. Business activity in the euro zone has expanded at the fastest pace this year so far in October, a survey showed. South Korea’s economic growth slowed slightly in the third quarter from April-June but still outperformed forecasts.
Technically market is under long liquidation as market has witnessed drop in open interest by -13.77% to settled at 5229 while prices down -1.15 rupee, now Zinc is getting support at 155.5 and below same could see a test of 154.5 level, And resistance is now likely to be seen at 157.5, a move above could see prices testing 158.5.
ZINC Trading Ideas:
♠ Zinc trading range for the day is 154.5-158.5.
♠ Zinc prices dropped on profit booking after prices gained fuelled by surging prices for Chinese steel and a pick-up in manufacturing activities.
♠ SHFE sheds stocks have been steadily declining, they stood at 165,295 tonnes, down from 207,163 tonnes at the start of the year.
♠ Premiums for zinc in Shanghai bonded zones rose by $5 to $115-$125 last week, the first rise since May, signs of an expected tightening supply.