Zinc Market Remains Supported Amidst Strong US Data
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The zinc market remains supported following strong U.S. economic data, which has boosted prices. Stabilizing ferrous metal prices and reduced social inventory also contribute to the market's strength. China's declining zinc output and potential production cuts further support high zinc levels. Overall, a bullish trend is anticipated.
Price
- LME: As of yesterday, LME zinc opened at $2,877/mt, reached a high of $2,925/mt, and a low of $2,877/mt, ultimately closing at $2,892/mt, up $15/mt or 0.52%. Today, LME Zinc trading is closed due to a weekly holiday.
- SHFE: As of yesterday, the most-traded SHFE 2410 zinc contract opened at 24,045 yuan/mt, hit a high of 24,065 yuan/mt, a low of 23,890 yuan/mt, and finally closed at 23,935 yuan/mt, down 155 yuan/mt or 0.64%. Today, SHFE Zinc trading is closed due to a weekly holiday.
- MCX: As of yesterday, zinc prices opened at ₹269.45/kg, reached a high of ₹271.45/kg, a low of ₹267.85/kg, and finally closed at ₹268.70/kg, up ₹0.50 or 0.19%. Today, MCX Zinc trading is closed due to a weekly holiday.
Demand and Supply
- LME Opening Stock: 244,775 mt
- Live Warrants: 220,475 mt
- Cancelled Warrants: 24,300 mt -Strong U.S. employment data highlighted economic resilience, boosting LME zinc prices, which remained elevated. Stabilizing ferrous metal prices improved galvanized production, while dwindling supply reduced social inventory, supporting zinc's high levels. China's zinc output declined for the second consecutive month in July, falling 9.2% to 536,000 tons, the lowest in a year. The trend may continue with potential monthly cuts of 30,000-40,000 tons from September to December, potentially reducing annual output by 3-4%. Global zinc market conditions tightened, with surpluses shrinking. Production in China was hit by heavy rainfall and unexpected cuts in multiple regions.
News
- Core PCE rose 0.2% in July, in line with forecasts, following a similar increase in June. The PCE Price Index year-over-year rose 2.5% in July, below forecasts of 2.6%, and matched the increase seen in June.
- Vedanta is set to contribute close to ₹1 lakh crore towards development, including a large-scale renewable power initiative, a state-of-the-art camel rehabilitation and conservation park in Barmer, and upgrading all Anganwadis into Nand Ghars.
- Industrias Peñoles announced an indefinite halt to operations at its Minera Tizapa unit in the State of Mexico on Friday due to a strike called by the national mining union. The mine, in which Peñoles holds a 51% stake, extracts lead, zinc, and copper.
Expert Opinion
- Zinc finds support at ₹267.9, with further support at ₹262. On the upside, resistance is expected at ₹273, and a move above this level could push prices to test ₹276.45. Overall, the Zinc futures market is expected to show a bullish trend in the upcoming days. It is anticipated that MCX Zinc futures may rise to ₹290 in the coming weeks.
Daily Market Report
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