Zinc showed resilience in its price performance, edging up by 0.11% to settle at 220.75, despite concerning economic data from China and Europe hinting at a slowdown and fears of a looming recession. China's refined zinc output in August witnessed a notable decline of 4.46% month-on-month, totalling 526,500 tons, which was considerably lower than expected. However, the year-on-year increase of 13.78% provided a silver lining. Cumulatively, refined zinc production from January to August stood at 4,304,000 tons, marking a 10.08% year-on-year rise.
China's economic woes persisted, with services activity expanding at its slowest pace in eight months. Eurozone also faced a worsening business activity decline. On the global stage, the zinc market witnessed a surplus of 76,000 metric tons in June, up from 67,000 tons the previous month, according to the International Lead and Zinc Study Group (ILZSG). This increase was part of a trend that saw a surplus of 370,000 metric tons in the first half of the year, compared to 241,000 tons during the same period the previous year.
From a technical perspective, the market experienced short covering, resulting in a drop in open interest by -0.26% to settle at 4225. Zinc's price saw a modest increase of 0.25 rupees. Key support levels for Zinc are at 219.3, with a potential further downside test at 217.9. Conversely, resistance levels are now expected at 222, and a breakthrough above could push prices to test 223.3.
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