Technically Zinc market is under long liquidation as market has witnessed drop in open interest by 5.55% to settled at 2674 while prices down 0.35 rupees.
Now MCX Zinc is getting support at 189.5 and below same could see a test of 188.5 levels and resistance is now likely to be seen at 192, a move above could see prices testing 193.5.
Zinc on MCX settled down -0.18% at 190.50 pared earlier gains to close down despite other metals rallied as a rebound in mine supply is expected to weigh on zinc prices, which was the worst performing base metal last year with a drop of nearly 20 percent.
Also pressure seen as Global mine production is expected to climb by 6.4 percent this year, up from only about 2 percent in 2018, the International Lead and Zinc Study Group predicts. “An abundant supply of zinc concentrate should limit the upside potential of refined zinc prices over the first half,” said analyst Daniela Corsini at Intesa Sanpaolo (MI:ISP) Bank in Milan.
The metal, which is mainly used for galvanizing steel, is expected to average $2,535 a tonne this year, down about 5 percent from Monday’s close. While traders increased their forecast for the global zinc deficit for 2019 to 50,000 tonnes from 31,000 tonnes in the October poll.
From data side the US conference Board consumer confidence for January came in weaker than expected at 120.2, versus the expectations of 124. The prior month was at 126.6, revised from 128.1. The January number was at the lowest level since July 2017.
Now a day ahead economic data slated for release today include Germany’s February Gfk consumer confidence index and January consumer price index, the eurozone’s January consumer confidence index, the US ADP (NASDAQ:ADP) January payroll report, December pending home sales and the EIA weekly crude inventory data.
Trading Ideas:
--Zinc trading range for the day is 188.5-193.5.
--Zinc despite of continued declines in LME zinc inventories and high proportion of cancelled warrants.
--In the latest in the Sino-U.S. trade dispute, Chinese Vice Premier Liu will visit US on Thursday and Friday for the next round of trade negotiations with Washington.
--On-warrant LME zinc inventories, have tumbled by half so far this year to the lowest levels since October 2007.