Zinc Prices Fluctuate Amid Supply Tightness and Economic Data

Key Insights

• LME Zinc Faces Pressure: LME zinc closed down at $2,972/mt, influenced by bearish market shifts and tight supply. SHFE Zinc Holds Bullish Momentum: SHFE zinc remained bullish, supported by domestic supply concerns and winter stockpiling.
• MCX Zinc Price Increase: MCX zinc prices rose by 0.61%, buoyed by stronger domestic market factors despite global pressures.
• Global Zinc Deficit Narrows: The global zinc market deficit decreased in September, showing an improved supply-demand balance.
• Economic Data Impacts Prices: Weak Eurozone data and US economic figures have contributed to the fluctuations in zinc prices.

Zinc Prices:

• LME: As of last Friday, LME zinc opened at $2,996/mt, reaching a high of $3,014.5/mt and low of $2,962.5/mt, finally closed down at $2,972/mt, a decrease of $31.5/mt or 1.05%. Today, LME Zinc trading commenced at 2,988.5/mt.
• SHFE: As of last Friday, the most-traded SHFE zinc 2412 contract opened at 25,030 yuan/mt, hitting a high of 25,235 yuan/mt and finally closed down at 25,165 yuan/mt, a decrease of 5 yuan/mt or 0.02%. Today, SHFE Zinc trading commenced at 25,270 yuan/mt
• MCX: As of last Friday, MCX Zinc prices opened at Rs 280.10/kg, reached the highest level of Rs 285.45, the lowest level at Rs 276.70/kg and finally closed down at Rs 282.25/kg, an increase of 1.70 or 0.61%. Today, MCX Zinc trading commenced at Rs 279.10/kg.

Zinc Supply & Demand

• LME Opening Stock - 261325 | Live Warrants - 249125 | Cancelled Warrants - 12200

• LME: Trading volume decreased to 77,815 lots, while open interest increased by 1,721 lots to 244,000 lots. Zinc prices shifted from bullish to bearish, with resistance at the 20-day moving average and support at the lower Bollinger Band. LME zinc inventories declined by 1.25%, indicating tight supply, which supports prices in the short term.

• SHFE: Trading volume fell to 51,368 lots, and open interest dropped by 6,411 lots to 86,173 lots. Zinc prices on SHFE showed bullish movement, with support at the middle Bollinger Band, while domestic supply issues and winter stockpiling keep prices elevated.

• MCX: Zinc prices fell by 0.85% to Rs 278.4, affected by weak eurozone economic data. Zinc ingot inventories in the Shanghai Bonded Zone increased by 500 mt, while total zinc stocks in China fell by 8,700 mt.

• The global zinc market deficit narrowed to 79,500 tons in September from 85,000 tons in August, and the year-to-date deficit reached 8,000 tons, contrasting with a surplus last year. In China, zinc production increased 2% month-on-month in September but fell 8% year-on-year due to regional smelter maintenance. Despite this, zinc remains under selling pressure, with open interest rising by 9.28% to 2,309 contracts.

Zinc News

• MCX Zinc dropped after data showed a tumble in Euro zone business activity.
• SHFE Zinc records a bullish candle, SHFE Zinc still fluctuates at highs.
• Last Friday, the US November PMI data increased; the total US national debt has surpassed $36 trillion.
• Base metals and iron ore gained as the dollar dropped following US President-elect Donald Trump’s measured pick for Treasury secretary. All major contracts on the London Metal Exchange advanced, tracking gains in stocks and other risk assets. The US currency sank by the most in more than two weeks, boosting commodities priced in it, following the nomination of Scott Bessent, a hedge fund manager, to the key role.

Expert Opinion

• In experts’ opinion, The next support level is at Rs 276.6, with a break below likely testing Rs 274.9. Resistance is expected at Rs 280.7, and a move above this level could push prices toward Rs 283.1. Zinc trading range for the day is 274.9-283.1.