MCX Zinc Ready For Big Move, Target 25—35 Points, Pure Technical Call | Neal Bhai Reports
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Neal Bhai Reports (NBR) By CFA’s and MFA’s Technical Team
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Zinc prices recovered amid uncertainties from the macroeconomic remain as the market worries about changes in the global trade patterns. Expectations for a rise in zinc concentrate supplies in coming years have driven down the metal price to one-year lows, but smelting capacity constraints suggest the sell-off is premature.
Stocks of zinc in LME approved warehouses, which now stand at 243,100 tonnes, are down 60 percent since September 2015 when Glencore here slashed 500,000 tonnes of annual zinc production. Meanwhile, stocks of the metal in warehouses monitored by the Shanghai Futures Exchange are down 63 percent since March.
The stocks draw in China is partly due to an environmental clampdown in the country, where the Chinese State Council’s bid to curb air pollution has expanded and meant less mining to produce zinc concentrate and less smelting to produce the metal.
Maintenance across smelters continued to weigh on supplies. There were also no large inflows of imported materials this week while downstream consumption fell to the lowest level in a seasonal lull. – Neal Bhai Reports (NBR)
