Zinc Prices Face Downward Pressure Amid Rising Production and Declining Demand
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Zinc prices saw minor declines across LME, SHFE, and MCX markets due to increased production and subdued demand. Although global refined zinc faced a deficit in October, production recovery and seasonal factors have kept prices under pressure. Experts anticipate price consolidation.
Key Takeaways
- Market Performance: Zinc prices declined across LME, SHFE, and MCX markets due to increased production and weaker demand.
- Global Supply-Demand: October saw a refined zinc deficit, but production recovery and seasonal factors are driving a market surplus.
- Trading Insights: LME and SHFE zinc trading volumes showed mixed trends, with prices consolidating due to inventory dynamics.
- Zinc Production in China: China's refined zinc production increased in December, contributing to downward pressure on global prices.
- Expert Outlook: Zinc prices are expected to consolidate, with support at Rs 270 and resistance at Rs 274.9, influenced by production trends.
Zinc Prices
- LME: As of yesterday, LME zinc opened at $2,863/mt, reaching a high of $2,875/mt and a low of $2,807.5/mt, and it ultimately closed lower at $2,867/mt, down by $1.5/mt or 0.05%. Today, LME Zinc trading commenced at $2,868.5/mt.
- SHFE: As of yesterday, the most-traded SHFE zinc 2503 contract opened at 23,565 yuan/mt, reached a high of 23,810 yuan/mt, and ultimately closed lower at 23,790 yuan/mt, down by 10 yuan/mt or 0.04%. Today, SHFE Zinc trading commenced at 23,760 yuan/mt.
- MCX: As of yesterday, MCX Zinc prices opened at Rs 272/kg, reached the highest level of Rs 273.60, lowest level at Rs 268.70/kg and finally closed down at Rs 273.10/kg, a decrease of 0.55 or 0.20%. Today, MCX Zinc trading commenced at Rs 273/kg.
Zinc Supply & Demand
- LME Opening Stock - 206375 | Live Warrants - 148800 | Cancelled Warrants - 57575
- LME: Trading volume rose to 13,621 lots, and open interest increased by 325 lots to 217,000. LME zinc gained as weaker consumption data eased inflation concerns and the US dollar softened.
- SHFE: Trading volume dropped to 72,873 lots, while open interest rose by 3,326 to 105,000. SHFE zinc rebounded on overseas market cues. Increased upstream supply and holiday demand dips limited upward potential.
- MCX: Zinc prices fell 0.2% to Rs 273.1 as China’s production grew steadily, offset by seasonal maintenance and holidays.
- Globally, refined zinc saw a deficit of 69,100 mt in October, while the 2024 surplus fell sharply due to declining production in key regions.
Zinc News
- MCX Zinc drops as China's refined zinc production rises over 1% MoM in December.
- Zinc prices will likely drop on output rebound, weak demand.
Expert Opinion
In experts’ opinion, Zinc witnessed long liquidation as open interest dropped by 5.17% to 2,276 contracts, with prices falling Rs 0.55. Support is at Rs 270, with further testing likely at Rs 266.9. Resistance is seen at Rs 274.9, and a move above this could test Rs 276.7, indicating consolidation amid production and inventory dynamics.
Daily Market Report
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