Zinc saw a -1.08% drop, closing at 225.2, as data suggesting a slowdown in Chinese manufacturing activity put pressure on prices. The official NBS Manufacturing PMI for China increased marginally to 49.2 in January 2024, but this is the fourth month in a row that factory activity has decreased due to issues like property weakness, deflationary risks, and headwinds from around the world.
On the other hand, the NBS Non-Manufacturing the purchasing manager’s Index (PMI) for China increased to 50.7 in January, marking the highest pace since September and the 13th consecutive month of growth in services activity.
In the absence of a substantial increase in demand for zinc and a shift in focus away from anticipated metal surpluses, it is improbable that production cuts will result in prolonged price increases.
Zinc prices briefly increased to $2,615 per metric tonne on the LME, the highest level in more than a week, following Nyrstar’s decision to halt its Budel smelting operation in the Netherlands due to excessive energy costs. It is predicted that 14 million tonnes of zinc will be supplied globally this year.
With a -9.96% decline in open interest and a settlement price of 2910, the zinc market is technically going through a protracted liquidation.
Support for zinc is located at 224; a breach below that could test levels 222.8. If the price moves above anticipated resistance at 227.1, it may test 229 on the upside. In order to be aware of any possible market movements in the upcoming sessions, traders should keep a close eye on these levels.