MCX ZINC NEWS : 09.01.2017
Zinc on MCX settled up 0.59% at 178.05 as prices recovered from lows despite of stronger dollar in the wake of strong manufacturing data from China. Zinc prices rallied in 2016 as supply cuts started to create some scarcity. Many major zinc miners decided to implement supply cutbacks after the metal slumped for a few years. Ironically, when these capacity cuts started to impact the supply chain in earnest in 2016, demand went through a bit of a revival. Zinc was one of the top performing commodities of 2016, there was some concern that major zinc miners would start to ramp up production to capitalize on higher prices. While this was a concern at first, now that the rally has continued and zinc miners have provided some clues into their plans, it is widely seen as unlikely that supplies will be quickly ramped back up. Miners remain cautious about the market, and rightfully so. China’s infrastructure spending programs have been a major boost to zinc demand and these programs will wind down in the second-half of the year. LME both stocks and cancelled warrants were down 75 tonnes at 427,600 tonnes and 115,250 tonnes, respectively. Combined zinc inventories in Shanghai, Tianjin and Guangdong added 9,500 to 210,600 tonnes this past week. Inventories in Guangdong fell, and those in the other two increased. Arbitrage operation drove shipments from Guangdong to Shanghai after the price spread between the two regions expanded to above RMB 300/mt. Downstream demand was weak, though, slowing outward shipments. Technically market is under short covering as market has witnessed drop in open interest by -1.8% to settled at 6000 while prices up 1.05 rupee, now Zinc is getting support at 175.7 and below same could see a test of 173.3 level, And resistance is now likely to be seen at 179.4, a move above could see prices testing 180.7.
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Zinc on MCX settled up 0.59% at 178.05 as prices recovered from lows despite of stronger dollar in the wake of strong manufacturing data from China. Zinc prices rallied in 2016 as supply cuts started to create some scarcity. Many major zinc miners decided to implement supply cutbacks after the metal slumped for a few years. Ironically, when these capacity cuts started to impact the supply chain in earnest in 2016, demand went through a bit of a revival. Zinc was one of the top performing commodities of 2016, there was some concern that major zinc miners would start to ramp up production to capitalize on higher prices. While this was a concern at first, now that the rally has continued and zinc miners have provided some clues into their plans, it is widely seen as unlikely that supplies will be quickly ramped back up. Miners remain cautious about the market, and rightfully so. China’s infrastructure spending programs have been a major boost to zinc demand and these programs will wind down in the second-half of the year. LME both stocks and cancelled warrants were down 75 tonnes at 427,600 tonnes and 115,250 tonnes, respectively. Combined zinc inventories in Shanghai, Tianjin and Guangdong added 9,500 to 210,600 tonnes this past week. Inventories in Guangdong fell, and those in the other two increased. Arbitrage operation drove shipments from Guangdong to Shanghai after the price spread between the two regions expanded to above RMB 300/mt. Downstream demand was weak, though, slowing outward shipments. Technically market is under short covering as market has witnessed drop in open interest by -1.8% to settled at 6000 while prices up 1.05 rupee, now Zinc is getting support at 175.7 and below same could see a test of 173.3 level, And resistance is now likely to be seen at 179.4, a move above could see prices testing 180.7.
