Zinc Prices Rise Slightly Amid Mixed Trading and Market Trends

Price

• LME: As of yesterday, LME zinc opened at $2,852.50/mt, reached a high of $2,882/mt, and a low of $2,840/mt, closing at $2,857.50/mt, up $1.50/mt, or an increase of 0.05%. Today, LME zinc trading commenced at $2,864/mt.
• SHFE: As of yesterday, the most-traded SHFE 2410 zinc contract opened at 23,740 yuan/mt, reached a high of 23,835 yuan/mt, a low of 23,645 yuan/mt, and closed at 23,825 yuan/mt, up 155 yuan/mt, or an increase of 0.65%. Today, SHFE zinc trading commenced at 24,000 yuan/mt.
• MCX: As of yesterday, zinc prices opened at ₹267.65/kg, reached a high of ₹269.50/kg, a low of ₹264.25/kg, and closed at ₹265.30/kg, a drop of ₹1.65 or 0.62%. Today, MCX zinc trading commenced at ₹267.25/kg.

Demand and Supply

• LME: Opening stock - 256,850 | Live warrants - 225,900 | Cancelled warrants - 30,950
• Trading volume rose to 11,203 lots, and open interest increased by 759 lots to 211,000 lots. LME zinc saw a bullish candlestick supported by the 5-day moving average. Inventory decreased by 775 mt to 256,850 mt, a 0.3% decline. The S&P Global flash US August Manufacturing PMI hit an eight-month low, signaling weak data. Revised jobless claims indicate a cooling labor market, reinforcing rate-cut expectations. Zinc prices remained high.
• SHFE: Trading volume dropped to 101,000 lots, while open interest surged by 7,806 lots to 120,000 lots. SHFE zinc formed a bullish candlestick overnight, with upper Bollinger Bands offering resistance. SMM reported a continued decline in zinc ingot social inventory. News of smelters' joint production cuts bolstered market bullish sentiment, pushing SHFE zinc prices higher.
• MCX: Zinc prices fell by 0.62%, closing at ₹265.30, due to profit booking after gains driven by improving Chinese demand. The rally was fueled by reduced supply expectations as Chinese zinc smelters delayed maintenance and new capacity due to tight ore supply and falling treatment charges. In July 2024, China's zinc concentrate imports dropped by 4.8% year-on-year to 375,373 tons, highlighting supply challenges.

News

• MCX Zinc Drops on Profit Booking After Gains Driven by China's Improved Demand.
• Chinese zinc smelters mull output cuts amid tighter supplies of zinc concentrates. The cuts are expected to reduce the demand for zinc concentrates by about 1 million tonnes (zinc contained) for 2024.
• Hindustan Zinc Fined ₹5.37 lakh each by BSE and NSE for breaching Regulation 17(1) of the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations. This regulation mandates a specific board composition, including independent directors, to ensure corporate governance and transparency.
• Zinc Ingot Prices Soar Across Asia as Supply Tightens and Demand Surges.

Expert's Opinion

• In opinion, the zinc market is under long liquidation, as evidenced by a sharp 31.19% drop in open interest, settling at 920 contracts while prices dipped by ₹1.65. Zinc is currently finding support at ₹263.30, with a potential test of ₹261.10 if this level is breached. On the upside, resistance is expected at ₹268.60, and a move above could see prices testing ₹271.70.