In MCX, Zinc near month futures slipped 0.66 percent last week - Geojit Financial
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London Zinc futures slipped last week but still trapped in a wide consolidation range. A firmer US Dollar and demand worries due to a new Corona led lockdowns in European Countries also weighed the sentiments.
ZINC
* LME Zinc closed lower shedding 1.98 percent last week. SHFE Zinc advanced more than 0.50 percent.
* In MCX, Zinc near month futures slipped 0.66 percent last week.
* The zinc inventory levels declined LME and SHFE warehouses.
* Cash over three month forward futures premium on LME Zinc is contango at $17.35 per MT.
Zinc prices steadied near yearly highs
On Major markets Zinc prices have been in congestion, although demand improvement in top consumer China as the traditionally peak season is nearing continue to support prices.
LME Zinc futures plunged 1.98 percent last week to $2774.5 per metric last week. China’s SHFE Zinc prices gained on domestic demand by 0.51 percent last week and closed at CNY 21570 per metric tonne. While on MCX platform, Zinc Jan futures prices slipped marginally by 0.66 percent last week and closed at Rs. 218,39 per kilogram on last trading day of previous week
Recent data revealed that social inventories of refined zinc ingots across China’s Shanghai Tianjin Guangdong Jiangsu Zhejiang Shandong and Hebei decreased 5700 mt from March 26 to 242300 mt as of March 29.
Official data also showed that zinc concentrate imports in the first two months of 2021 declined 1.8% from a year earlier to 679,758 tonnes, while refined zinc imports jumped 60.15% to 87,345 tonnes.
Meanwhile, zinc production in January and February combined rose 2.8% year-on-year to 1.08 million tonnes, Chinese official data showed.
Global Zinc market surplus shrank in January – ILZSG
The global zinc market was oversupplied by 11,700 tonnes in January after a revised surplus of 23,500 tonnes in December, the International Lead and Zinc Study Group (ILZSG) showed. For 2020, the surplus in the roughly 13.5 million tonne a year market was 536,000 tonnes according to the ILZSG.
Warehouse stock level
The Zinc inventory levels in LME registered warehouses decreased to 270500 MT. The inventory level in China’s SHFE registered warehouses dipped as well by 5341 MT last week and totalled 113125 MT.
Outlook :
Prices continue to consolidate in the immediate future, but it may gradually gain momentum on expectations over increased physical demand from top consuming countries.
LME: Inability to break $3000 expect corrective selling immediately but it likely to hold the support of $ 2590 and turn higher later
MCX: Prices needs to break and stabilize above 226 to continue bullish outlook in the counter. Else, there are chances of selling pressure but stiff support is seen at 184.
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