Zinc Prices Edge Up with Support from Increased Consumption and Spot Premiums
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Zinc prices showed modest gains across major exchanges, with LME zinc rising by 0.35%, SHFE increasing by 0.88%, and MCX zinc up by 0.29%. This uptick came amid slight improvements in consumption, high spot premiums, and rumours of production cuts. The global zinc market also faces a widening deficit, although China's zinc production has increased slightly.
Key Highlights
- Prices Up: LME Zinc closed up at $2,976.5/mt with a slight increase of 0.35%, SHFE Zinc increased by 0.88% and MCX Zinc rose by 0.29%.
- Zinc Deficit: The global zinc market saw a widening deficit of 66,300 mt in August, up from 51,000 mt in July.
- Supply Pressure: Zinc concentrate imports dropped by 18% in October, contributing to market fluctuations.
- Market Outlook: Experts predict support for zinc prices at Rs 278.3, with resistance at Rs 280.7, and a potential upward move if prices surpass Rs 282.1.
Zinc Prices
- LME: As of yesterday, LME zinc opened at $2,969/mt, reaching a high of $3,007/mt and low of $2,955/mt, finally closing up at $2,976.5/mt, an increase of $10.5/mt or 0.35%. Today, LME Zinc trading commenced at 2,980.5/mt.
- SHFE: As of yesterday, the most-traded SHFE zinc 2412 contract opened at 25,150 yuan/mt, hitting a high of 25,270 yuan/mt and low of 25,065 yuan/mt, closing up at 25,170 yuan/mt, an increase of 220 yuan/mt or 0.88%. Today, SHFE Zinc trading commenced at 25,200 yuan/mt.
- MCX: As of yesterday, MCX Zinc prices opened at Rs 278.90/kg, reached the highest level of Rs281.10, the lowest level at Rs 278.75/kg and finally closed down at Rs 279.20/kg, an increase of 0.80 or 0.29%. Today, MCX Zinc trading commenced at Rs 279.20/kg.
Zinc Supply & Demand
- LME Opening Stock - 268325 | Live Warrants - 249450 | Cancelled Warrants - 18875
- LME: LME zinc saw increased trading volume of 11,263 lots, with open interest dropping by 4,232 lots to 241,000. Zinc’s four-day winning streak faced resistance from the 10-day moving average, while increasing LME inventory and a stronger US dollar pressured prices. Market rumors of production cuts contributed to slight gains.
- SHFE: Trading volume fell to 53,798 lots, while open interest rose by 586 lots to 98,559. Zinc’s three-day winning streak continued, but imports of zinc concentrate dropped 18% in October, causing price fluctuations.
- MCX: MCX zinc prices rose 0.29% to Rs 279.2 due to increased consumption and high spot premiums. However, imported zinc concentrate fell 18.17% MoM and 23.85% YoY. Year-to-date imports were down 19.74%.
- The global zinc market saw a widening deficit of 66,300 mt in August, compared to 51,000 mt in July. China's zinc production increased slightly, though October’s industrial output rose just 5.3%, falling short of expectations.
Zinc News
- MCX Zinc rose as consumption slightly improved, and spot premiums remained high, offering support.
- A takeover battle over Korea Zinc opens a new tab and adds pressure on Seoul to pass legislative reforms to ensure better protections for all investors in a country with a stock market dominated by family-run conglomerates.
Expert Opinion
- In experts’ opinion, the market saw short covering with an 8.69% drop in open interest to 2,080. Zinc finds support at Rs 278.3, with further downside to Rs 277.3, while resistance is at Rs 280.7, above which prices may test Rs 282.1. Zinc trading range for the day is 277.3-282.1.
Daily Market Report
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