Zinc prices fell -1.91% to close at 220.9 as worries about China’s economic activity continued. China’s official PMI data revealed the 4th consecutive month of factory activity contraction. Which disappointed investors and raised doubts about a turning point in the country’s economic growth.
Despite the Caixin China General Manufacturing the purchasing manager’s Index unintentionally remaining at 50.8 in January—the same level as in December—beating market expectations and indicating the third consecutive month of growth in factory activity, an unanticipated contraction has occurred.
The decision by Swedish miner Boliden to shut down operations and lower planned output at its zinc mine in Ireland, Tara, further exacerbated the unfavourable sentiment.
The largest zinc mine in Europe, the mine went into maintenance and care in June because zinc prices had dropped for three years.
For a scheduled resumption in the 2nd quarter of this year, Boliden is in talks with staff. From 62,500 tonnes in October to 71,600 metric tonnes in November 2023, the global zinc market was in deficit. According to data from the International Lead and Zinc Study Group (ILZSG).
Technically, there is new selling pressure on the zinc market as evidenc by a 21.51% rise in open interest to 3536 and a -4.3 rupee price decline. Zinc prices is found to have support at 219.7, with a potential test level of 218.4 below. Resistance on the upside is probably at 223.1; a move above there could take the price to 225.2.