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Zinc Prices Update: Stability Amid Mixed Signals

zinc-Prices-update-stability-amid-mixed-signals
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Zinc prices update: prices held steady at ₹273.05, as market dynamics balanced between a strong U.S. dollar and optimism around China’s economic stimulus measures.

  • U.S. Dollar Pressure: Robust U.S. economic data, including stronger-than-expected job growth and a drop in the unemployment rate to 4.1%. Supported the dollar, applying pressure on base metals.

  • China’s Stimulus Outlook: Beijing’s renewed commitment to economic support bolsters hopes for increased demand for industrial metals, including zinc.

  • Inventory Levels: Zinc stocks monitored by the Shanghai Futures Exchange fell by 10.8% from last week.rEflecting a tightening supply outlook.

  • December Production Rise: China’s domestic refined zinc production climbed over 20,000 metric tons month-on-month in December, driven by gains in Qinghai, Inner Mongolia, Xinjiang, Hunan, and Shaanxi.

  • Yearly Decline: For 2024, cumulative domestic refined zinc production dropped by over 6% year-on-year due to constrained output earlier in the year.

  • Global Market Trends: The global zinc market deficit widened to 69,100 metric tons in October, compared to 47,000 tons in September. Yet, for the year’s first ten months, the surplus stood at 19,000 tons, significantly lower than 356,000 tons in the same period last year.

  • Production Dynamics: Global refined zinc production fell by 1.7%, with mine production shrinking 3.8%, impacted by declines in Canada, China, South Africa, and Peru.

  • Technical Insights: Open interest in zinc contracts dropped 7.55% to 2,559, indicating long liquidation.

  • Key Levels for Traders:

    • Support: ₹271, with potential downside to ₹268.8.
    • Resistance: ₹275.5, with a breakout possibility up to ₹277.8.

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