Zinc prices fell marginally, falling -0.58% to 223.15, as a result of ongoing imports of zinc ingots and worries about a slow recovery in consumption. Pressure increased when zinc inventories in Shanghai Futures Exchange warehouses increased by 11.3%.
However, supply worries resulting from the South Korean smelter Seokpo’s output cut limited the downside.
This large cut could possibly narrow the anticipated market surplus or even cause a deficit, which would increase market ambiguity.
A number of factors impacted market sentiment, including expectations of increased demand in response to statements made by Fed policymakers and less-than-expected the United States labour market data. Which supported interest rate reduction expectations.
Notwithstanding the continuous decline in manufacturing activity, the government chose not to announce further stimulus measures, adding to the downward pressure caused by uncertainties surrounding China’s economic recovery.
Zinc prices were also affected by elevated inventories at LME warehouses, indicating a plentiful supply on the international market.
The International Lead and Zinc Study Group (ILZSG) data, however, showed that there was a global zinc market deficit in December 2023. Even though there was a surplus for the entire year 2023 compared to the deficit in 2022.
Technically, the market experienced long liquidation, as shown by a -3.01% decline in open interest and a -1.3 rupee price decline. Support for zinc is seen at 221.7, with a possible decline to 220.1. On the other hand, resistance is expect at 225.4; a move above there is likely to result in testing the 227.5 levels.