The price of MCX zinc prices fell by -1.36% to settle at 217.95, driven by changes in economic & production indicators. Market sentiment was affected by Glencore’s (LON:GLEN) decision to resume production at its zinc smelter in Nordenham following more than a year of care and maintenance.
Supply dynamics were upset by the production halt in 2022. That affected other European smelters as well because of the spike in electricity prices that followed Russia’s invasion of Ukraine. On the other hand, China’s industrial output exceeded forecasts, increasing by 7% yearly in January and February, demonstrating the manufacturing sector’s resilience.
Even so, worries about the real estate market remain as investment in real estate dropped. Albeit more slowly—by 9%—than it had the month before.
February’s 11.36% month-over-month decline in China’s refined zinc output was mostly caused by smelter closures for maintenance over the Chinese New Year holiday.
Strict supplies of raw materials for zinc concentrate further postponed the start of production for some businesses. Which resulted in lower output. Supply shortages were exacerbated by the concentration of decreases in output in provinces like Guangdong, Sichuan, Hunan, and Shaanxi.
Technically speaking, the zinc market saw long liquidation, as evidenced by a sharp decline in open interest of -12.03% to 2,874 contracts and a drop in price of -3 rupees. MCX Zinc prices has been found to have key support levels at 216.6, with potential downside testing towards 215.2 levels.
Resistance on the upside is anticipat at 220.3. And a breakout there could trigger additional gains in the direction of 222.6.