Zinc rose 1.42% to 224.25, buoyed by increased risk sentiment as China, the world’s largest consumer, considered measures to increase funding and stabilise its stock market. To stabilise the collapsing stock market, Chinese authorities are contemplating a comprehensive package that would mobilise roughly 2 trillion yuan.
In order to maintain market confidence, the Chinese cabinet has promised to implement practical measures. Such as increasing injections of medium- and long-term funds. The International Lead and Zinc Study Group (ILZSG) reports that as of November 2023.
The global zinc market deficit had increased to 71,600 metric tonnes from 62,500 tonnes in October.
Nonetheless, compared to a low of 86,000 tonnes during the same period in 2022. There was an overall gain of 211,000 tonnes for the first 11 months of 2023. In December 2023, China’s output of refined zinc rose by 2.05% on a monthly basis to 590,900 mt, representing a 12.38% year-over-year increase.
The total amount of refined zinc produced between January & December was 6.622 million mt. Indicating a noteworthy 10.77% increase in output from the previous year. December saw 102,900 mt of domestic zinc alloy production, an increase of 9,600 mt over November.
From a technical perspective, the market is experiencing new buying as evidenced by the 15.13% rise in open interest to 2778 and the 3.15 rupee price gain.
Zinc has support at 221.9; a break below that could take it as low as 219.6. Resistance is seen at 225.7 on the upside, and a break through here could result in additional testing at 227.2.