MCX ZINC NEWS : 13.01.2017

MCX ZINC NEWS : 13.01.2017


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Zinc on MCX settled up 1.36% at 186.10 on short covering as traders are now making long positions which appear to be being re-established as fundamentals are strong and, while suspended capacity remains idle, the deficit is likely to draw down stocks of concentrates and refined metal. Sentiments still remain firm for Zinc prices as fundamentals still look more bullish – mine output shortages are leading to lower treatment charges, in turn causing some smelters to cut output in China. Growing demand will therefore require a greater drawdown in refined metal stocks. For now LME stocks are only drifting lower. Although there is idle mine capacity that can be reactivated to alleviate the supply deficit, there are few signs of this unfolding yet. Zinc prices have recorded the strongest gains last year (2016), up 50 percent from January to September, due to ongoing supply tightness from mine closures and voluntary production cuts, amid strong steel demand. Yesterday LME zinc closed up 1.1 per cent at $US2,728 a tonne leading gains across most base metals as the US dollar weakened on U.S. president-elect Donald Trump's failure to give clear policy details at his first news conference since November. At his press conference on Wednesday, Mr Trump gave no details on tax cuts and infrastructure spending, two factors that had fuelled a five-week rally in stocks and a sell-off in global bond markets. Now technically market is under short covering and getting support at 183.7 and below same could see a test of 181.1 level, And resistance is now likely to be seen at 187.9, a move above could see prices testing 189.5.