Global Zinc Deficit Rises as Prices Fluctuate Amid Mixed Signals
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LME zinc prices increased marginally to $2,972.5/mt, supported by inventory declines, while SHFE zinc recorded bearish momentum, closing at 24,820 yuan/mt. A global zinc deficit of 69,100 mt emerged in October due to reduced production in China, Canada, and Peru, driven by economic challenges and supply constraints.
Industry Updates:
- LME Zinc Prices Show Marginal Increase: LME zinc closed at $2,972.5/mt last Friday, up 0.08%, supported by inventory declines and resistance from moving averages.
- SHFE Zinc Records Bearish Momentum: SHFE zinc closed at 24,820 yuan/mt, down 0.56%, as domestic supply imbalances eased, yet tight spot supply continued to provide price support.
- Global Zinc Deficit Widens: The global zinc deficit rose to 69,100 mt in October, driven by reduced output in China, Canada, and Peru amid economic challenges.
Zinc Price
- LME: As of last Friday, LME zinc opened at $2,960/mt, reached a high of $2,997.5/mt and a low of $2,949.5/mt, and ultimately closed higher at $2,972.5/mt, up $2.5/mt or 0.08%. Today, LME zinc trading commenced at $2,978/mt.
- SHFE: As of last Friday, the most-traded SHFE zinc 2502 contract opened at 24,895 yuan/mt, reached a low of 24,670 yuan/mt, and ultimately closed lower at 24,820 yuan/mt, down 140 yuan/mt or 0.56%. Today, SHFE zinc trading commenced at 25,025 yuan/mt.
- MCX: As of last Friday, MCX zinc prices opened at ₹280.65/kg, reached the highest level of ₹280.95, the lowest level at ₹277/kg, and finally closed down at ₹279.10/kg, a decrease of ₹0.30 or 0.11%. Today, MCX zinc trading commenced at ₹279.75/kg.
Zinc Supply & Demand
- LME Opening Stock: 254,125 | Live Warrants: 172,250 | Cancelled Warrants: 81,875
- LME: Trading volume fell to 85,879 lots, with open interest down by 1,127 lots to 230,000 lots. LME zinc showed resistance from moving averages and support from the lower Bollinger Band. Inventory declined by 3,400 mt to 254,125 mt. Zinc prices fluctuated as inflation data impacted interest rate expectations.
- SHFE: Trading volume dropped to 78,319 lots, while open interest rose by 3,172 lots to 129,000 lots. SHFE zinc recorded a bearish candle with no upper shadow. Supply imbalances eased domestically, yet tight spot supply supported prices. Zinc prices are expected to fluctuate upward amid these mixed market signals.
- MCX: Zinc prices increased by 0.11% to ₹279.10, supported by inventory declines and production challenges. SHFE-monitored inventories fell by 20.80%. A global zinc deficit reached 69,100 mt in October, up from September. Reduced output in regions like Canada, China, and Peru, along with economic struggles in China, affected sentiment.
- Beijing's stimulus failed to instill confidence due to vague details. The U.S. Federal Reserve plans a 25 basis point interest rate cut, signaling cautious easing. Smelter output rose in regions like Qinghai and Xinjiang but declined in Henan and Gansu, reflecting mixed global production trends.
Zinc News
- SHFE zinc records a bearish candle; SHFE zinc may maintain a fluctuating trend.
- MCX zinc gains as inventories in SHFE warehouses fell 20.80% from last Friday.
- Last Friday, the US Fed's preferred inflation indicators were all below expectations.
Expert Opinion
In opinion, zinc is under short covering, with open interest dropping by 25.15% to settle at 1,155, while prices rose by Rs 0.30. Support levels are at Rs 277.10, with a possible test of Rs 275.10. Resistance is expected at Rs 281, with prices potentially reaching Rs 282.90 on a bullish breakout.
Daily Market Report
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