OfBusiness Zinc Dailies | 7th July 2023

Price

• LME zinc closed at $2,360/MT, up $10/tn (+0.43%) from the opening price of $2,350/MT. The market showed positive sentiment amid discussions on export restrictions and the potential interest rate hike by the Fed.
• SHFE zinc in Shanghai opened at 20,270 Yuan/MT, rising by 85 Yuan compared to the previous trading session.
• MCX zinc on the Multi Commodity Exchange closed at Rs. 215/Kg, which was Rs. 1.05/Kg higher than the opening price of Rs. 213.90/Kg. The increase in open interest and the price decrease indicate a short-buildup position. The open interest in the Zinc July contract increased by 0.75%.

Demand and Supply

• The LME opening stock for zinc is 74,775 MT, with 12,950 MT in cancelled warrants. The monthly output of zinc ingots was 555,500 MT in June and is expected to be 544,800 MT in July. In addition, more than 30,000 MT of imported zinc may flow into China. Therefore, zinc supplies remained ample. However, current fundamentals exert little impact on the zinc market. Players still need to pay attention to changes in macro-market sentiment.

News

• The US Dollar index rose to 103.40, and the US 10-year bond yield reached 3.95%, the highest since the banking crisis period in March 2023. ADP non-farm employment data, unemployment claims, ISM services PMI, and JOLTS job openings are key focus areas for the day.

OFB’s Opinion

• Is that mixed sentiment prevails in zinc prices due to the confirmed rate hike by the US Federal Reserve and news of export restrictions. On the technical front, support levels for zinc are at Rs. 213.10/Kg,, and a potential test of Rs. 212/Kg levels may occur if the price falls below this support. On the upside, resistance is expected around Rs. 215.45/Kg, and a breakthrough could lead to prices testing Rs. 216.5/Kg.